Tesco, the world’s third-largest retailer, announced it plans to grow sales into China to US$6.4bn within the next five years.
Asia has become increasingly important to the company with the area now accounting for 16 per cent of group sales and 13 per cent of profits, according to a report in the Daily Mail. Tesco now generates 31 per cent of sales and 22 per cent of profits from its international operations.
South Korea, which is Tesco’s largest international market, has seen sales increase 6.7 per cent in the nine weeks from 31 October, from 6 per cent in the quarter before that, reported the Daily Mail
This growth, however, was eclipsed by that in China where sales rose 8.3 per cent in the most recent quarter, down slightly on a 9.3 per cent increase in the previous quarter.
The newspaper reported Tesco has predicted its operations in China will break even for the first time within the coming months.
“China offers an unrivalled opportunity in a large and rapidly growing market,” said Tesco’s international boss Philip Clarke.
“The prize is enormous but the challenge is complex – China is a vast continent, with cities the size of small countries.”
The company now plans to expand into second tier cities, opening a series of hypermarkets and shopping malls, reported the newspaper. The company plans to run more than 150 leasehold hypermarkets and 50 freehold malls, by 2015.
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