Bullish multinational retailers plan major China investments
Bolstered by a rebound in China's consumer sentiment, leading multinational retailers have laid out ambitious investment plans and they continue to regard the country as an exciting market with vast opportunities and potential.
From Walmart, LEGO to IKEA, China once again became a highlight in terms of market performance for retail spending.
Retail sales of consumer goods in China maintained a relatively fast growth of 8.2 percent year on year in the first half of this year, 2.4 percentage points higher than that in the first quarter.
Local customers shop at a Sam's Club outlet in Shanghai. Membership-only retailers have seen strong demand from shoppers.
With progression of economic and consumption concepts, more customers are embracing new shopping formats such as membership-only clubhouse models.
Driven by strong performance of Sam's Club and e-commerce spending, sales of Walmart China in the second quarter jumped 21.7 percent to 29.9 billion yuan (US$4.2 billion), much faster than the pace of 5.7 percent globally and becoming a major contributor to the United States group's international business segment.
The company said in its latest earnings report that both online and offline traffic at Walmart's China stores have been rising, and e-commerce net sales surged 44 percent, benefiting from continuous expansion of delivery capability which now covers all of its stores in China.
Specifically for Sam's Club, a series of seasonal promotions covering fresh food, Chinese and Western cuisine and cooking ingredients are a magnet for local shoppers as demand for high-quality home meals continues to climb.
The biggest LEGO certified store on the Chinese mainland was launched in Changsha, central Hunan Province, earlier this month.
LEGO Group said it will continue to expand its retail footprint and online presence in China to reach more children after managing to outperform a declining toy market in the first six months.
Globally, consumer sales grew 3 percent and contributed to the significant increase in market share.
In early August, the Danish group opened the biggest LEGO certified store on the Chinese mainland in Changsha, central Hunan Province. Covering 504 square meters, it hosts a full product line and offers a more immersive and playful experience.
"We are driven by Chinese consumers' demand for high-quality products and shopping experience to continue expansion of our retail networks," commented Paul Huang, senior vice president of LEGO Group and general manager of LEGO China.
The new store is expected to cover not only Hunan but also Hubei, Guangdong, Yunnan, and Guizhou provinces as well as the Guangxi Zhuang Autonomous Region as LEGO deepens its penetration in China's central and southwestern regions.
The company said it aims to shape more brand retail experience from different aspects and forge closer ties with children and families.
IKEA hosts a wide range of combination for home storage and organization solutions.
IKEA, meanwhile, announced plans to invest 6.3 billion yuan over the next three years in China to strengthen home living-related service, omni-channel expansion and tailor-made shopping experience.
President and CEO of IKEA China Pontus Erntell said at a media briefing earlier this week that the Swedish retail giant is looking to become a trusted partner by leveraging its home living expertise and deep professional know-how.
It sees increasing consumer demand for affordable, accessible and sustainable home living products and solutions that are more relevant to local demand.
In addition to enhancing operation efficiency, IKEA also aims to explore new possibilities for home living and retail models.
IKEA's home design service will also focus on more flexible and tailor-made offerings for those to wish to decorate or renovate a small part of their living space instead of a whole apartment or house.
