Wal-Mart Stores Inc, the world's biggest retailer, plans to open its first outlet in Jinjiang, Fujian Province this month.

The US-based firm plans to build stores in several other second-tier cities including Yuxi, Yunnan Province; Weifang, Shandong Province; and Wuhu, Anhui Province by the end of this year.

The company also says it is conducting market research in even smaller cities such as Shaoxing in neighboring Zhejiang Province.

"We see surging demand for consumption in small cities these years, which offers us a good chance to expand our investment in China," said an official of Wal-Mart, who declined to give his name.

Business analyst Li Mingliang from Haitong Securities Co Ltd said that if Wal-Mart opened in smaller cities it would create challenges for its rivals in those areas.

The company declined to release its revenue this year, but said sales across the country have been satisfactory.

According to Fortune 500 report, Wal-Mart achieved sales of more than US$288.189 billion in 2004, topping the list for the fourth straight year.

Wal-Mart opened six stores this year in China, including its Pudong New Area location.

The world's biggest retailer now has 49 stores in the country, either in provincial capitals or east coast cities. It employs more than 27,000 people in China.

The firm expects to add 12 more stores in 2006, according to Xinhua news agency, citing Wal-Mart's Chief Executive Officer H. Lee Scott.

Wal-Mart also said it improved sourcing from domestic suppliers since its entry into China in 1996. The retailer now has about 19,000 suppliers across the country.

(Shanghai Daily November 11, 2005)