Business

Thursday October 1, 2009

Wal-Mart has no plans to open hypermarket in Malaysia


It plans to expand in China and India

THE world’s largest retailer, Wal-Mart Stores Inc, wants to expand in China and India but has no plans to open hypermarkets in Malaysia, said chairman S. Robson Walton.

“We are focusing on the larger markets and China is a big opportunity for us,’’ he said.

In India, he said the retailer was “just getting started’’ where there were great opportunities over the longer term.

“We are planting the seeds that will grow but that will be some five to 10 years,’’ he said, adding that for Malaysia, it was “not so soon.”

Walton did not give details on the expansion into India and China.

Investing abroad has not been an easy exercise for Wal-Mart even though it now operates in 15 countries.

It has learnt many lessons but the most important was about being respectful to local customers, conditions and regulations, said Walton who was awarded this year’s Malcolm S. Forbes Lifetime Achievement Award.

He is the fourth recipient after steel magnate Lakshmi Mittal (2008), LAS Vegas Sands Corp chairman and CEO Sheldon G. Adelson (2007) and Hong Kong tycoon Li Ka-Shing (2006).

This award is presented to honour a lifetime of achievements in entrepreneurial capitalism and is the highest form of recognition Forbes Inc bestows on a single individual.

Walton is the son of Wal-Mart founder Sam Walton.

Together with his CEOs, the chairman has grown the company’s revenue from US$67bil to US$400bil over 17 years.

Wal-Mart operates in 15 countries with 8,100 retail units, has over 200 million customers a week, employs over 2.1 million associates worldwide and deals with hundreds of suppliers globally.

“We resonate with people and save people’s money so that they can live a better life, more so in challenging times,’’ Walton said.

Despite the turnaround in the global economy, sales remain tough but Asia will lead the recovery, he added.

“Recovery will be a slow one and there are no immediate returns. It does create (keen) competition. (In the crisis), we see more customers buying health care products, drugs and medicines, clothes for their children but not for themselves, and food to cook rather than eat out,’’ Walton said, adding that he saw opportunities in the healthcare business but did not elaborate.

Sustainability has become a key part of the company and that effort is driven top down.

The enviromental initiative started four years ago and Wal-Mart has achieved cost savings by re-packaging, lighting and installation of auxiliary power units in its truck fleet.

They work with vendors that are committed to conservation.

Walton is chairman of the Centre for Environmental Leadership in Business.

Like Wal-Mart, Malaysian-born Dr Enki Tan, who is chairman of Giti Tire Pte Ltd and a member of the Conservation International, is focused on sustainability.

His company has also recorded substantial savings by going green.

Instead of using coal to fire generators to produce steam, it has substituted it with rice husks and that has helped the company save cost by 30%.

“Green is an area of opportunity and there a lots of opportunity on revenue and cost savings,’’ Tan said.

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