Wumart Stores has reported a 52% rise in earnings for the 2005 financial year, primarily driven by aggressive store expansion and acquisitions.
The largest retailer in the Beijing area, Wumart has relied on store expansion and acquisition to give it a competitive edge against foreign rivals in the rapidly expanding US$240bn Chinese retail market.
The nation’s retail industry is dominated by Chinese companies such as Bailian Group and Wangfujing Group, but foreign corporations like Carrefour, Metro and Wal-Mart are investing heavily in what they have identified as an area with major growth potential.
Wumart, whose stock has risen 57% in 2006, has reported that its 2005 net profit increased to CNY164.5m (US$20.44m) from CNY107.94m a year earlier. The number of Wumart outlets increased from 453 last year to in excess of 500 stores today. According to Reuters Estimates, Wumart is expected to grow its 2006 profit by around 44% to nearly CNY238m.