Walmart expands in third- and fourth-tier cities

The world's largest retailer by revenue Walmart Stores Inc opened four new stores on Thursday as part of its efforts to market to the country's third- and fourth-tier cities.

The new stores are at Fuzhou, Fujian province; Zhuhai, Guangdong province; Pu'er county, Yunnan province; and Aotou, Huizhou.

Walmart last year announced plans to open 100 new stores between 2013 and 2015, including 30 this year.

In the next three months, Walmart will also open facilities in Shanghai, Hebei and Hubei provinces.

President and CEO of Walmart China Greg Foran said despite pressure and increasingly fierce competition in the retail industry in 2013, Walmart aims to focus on building a solid foundation for its development and readjusting its store mapping.

The closure of some stores recently does not affect its direction of increasing investment and upgrading store levels, Foran said.

“Besides further expansion into the first-tier and second-tier cities, Walmart will open stores in third-tier and fourth-tier cities, or even small towns,” he said.

Foran said the company will continue its efforts to build a modern logistics network, investing in food safety, remodeling existing stores and adding 25 percent more Sam's Clubs this year.

Retail experts said such expansion to smaller cities is often encouraged by local developers. However, this could lead to challenges in terms of operations, sales and logistics, which are not very well equipped in those regions, said Hermann Ng, CEO of Retail Nation, a consultancy firm based in Shanghai.

Ng said foreign retailers often face even more competition with local rivals in third- and fourth-tier cities, because local retailers have been there longer.