Walmart looks to acquisition in China for Asia expansion

US retailer Walmart is considering acquisitions in China after the global supplier's sourcing practices came under increasing scrutiny after safety problems emerged at some factories in Bangladesh.

With its India plans still in the woods with increased government scrutiny and Walmart Stores Inc finding retail plans with India partner Bharti Enterprises "not tenable", a deepening of its China business is the best way for the global retailer to move forward.

Both Walmart and its Indian partner Bharti are expected to decide on their retail plans later this month.

Walmart, meanwhile said it has revamped its practices in the region so as to comply with regulations and legal requirements after its textile and garment sourcing also got burned in a devastating fire in one of Bangladesh's garment units.

Reports quoting Scott Price, chief executive of Walmart's Asia division, however, said the company was only a customer of company using the Bangladesh factory that caught fire killing more than 430 people.

"We've been working on creating safe working facilities rather than looking for a different sourcing environment," Price told the Asia Pacific Economic Cooperation conference in Bali, Indonesia.

With stagnant markets in most advanced economies like the US and other western countries, Walmart is trying to expand more rapidly in other regions such as Brazil, where Walmart has about 570 stores.

Price said WalMart was looking at acquisitions in China, aiming to build its market share in cities where it isn't already the No1 or No2 player.

"A year ago in China, I wasn't happy with where we were, but I feel different now," he said.

Employees of the retailer were arrested and detained in China's Chongqing in late 2011 over alleged mislabelling of ordinary pork sold as a more expensive organic variety. Walmart had to apologise and agree to revamp its practices.

Walmart, with 398 stores in China, is No2 in market share, behind China-based Sun Art Retail Group Ltd, which is a joint venture of Taiwanese conglomerate Ruentex Industries Ltd, while France's Groupe Auchan SAhas 284 stores in China.

WalMart's China division has a stronger compliance system and a new management team this year. Its online arm, Yihaodian, in which WalMart has a 51 per cent stake, has 24 million users, Price said.

Despite the uncertainty over retail business in India, Walmart has no plans to leave the country and was actually hoping to expand its wholesale business, Price said.

"We are committed to India and we are not thinking of leaving India anytime soon," he said.