Wal-Mart Seeks Growth in Small Town China
China’s economic growth is rapidly spreading out from the main cities like Beijing and Shanghai into the hinterlands, where the middle class is taking off. In a report last year, the consulting firm A.T. Kearney said 75 percent of the middle market is expected to be in tier-two and tier-three cities by 2017.
These cities are “small” only by the standards of a country with 1.3 billion people. For example, Wuhu in eastern China has 2.3 million people and Maoming in the south has 6.8 million, providing a strong consumer base as incomes rise.
In response, retailers are pushing into the hinterlands, including American coffee chain Starbucks Corp. and French store Carrefour SA. Carrefour, the world’s second-largest retailer after Wal-Mart, is the largest foreign retailer in China.