10.24.06
Retail in China
Wal-Mart is teaming up with GE and China’s Shenzhen Development Bank to launch a credit card in China. The card is dual-currency and can be used inside China or abroad. Even though less than 5 percent of China’s population has a credit card today, this does represent a trillion dollar market in the coming decade, and one of the most enticing opportunities for banks and alike. By given additional financing power to Chinese consumers, Wal-Mart can help millions of affluent Chinese middle class to shop better in its stores and build a brand recognition and trust associated with a financial institution. Accord to Wal-Mart, it is on track to have 77 stores in China by the end of this fiscal year on January 31.
What else can credit card buy? Maybe KFC’s chicken? According to Yum Brands, KFC’s parent, there are 1,700 KFCs spread across 400 cities in China. Yum’s operating profit in China jumped 26% to $105 million on a $445 million in sales, compare to the US number, where Yum achieved less than 1% operating profit gain with 7% decline in sales. Wonder what would happen if KFC also offer credit card in China? Hmmm, Finger-Lickin’ Good card…
