business news in context, analysis with attitude

• The Wall Street Journal reports that Walmart is taking a somewhat more relaxed approach to its African expansion that it has in past efforts where it was opening in developing markets.

The story notes that "when the U.S. retail behemoth bought a $2.4 billion majority stake in South African retailer  Massmart Holdings Ltd. in 2011, it trumpeted the potential of the continent’s burgeoning consumer class. At the time, Massmart had 26 stores outside its home market; in the five years since, it has added only 13 of its signature large destination-type outlets. In that same span, by contrast, rival Shoprite Holdings Ltd. has opened 182 of its mostly smaller, grocery-centric stores outside South Africa, for a total of 375."

There are some economic reasons for the slower pace, as the Journal writes that "recent sharp fluctuations in African currencies—a result of the commodities crisis—have jolted businesses including retailers, especially because loans in many African countries are dollar-denominated. And inflation, a malady in various economies on the continent, has cut into the buying power of middle-class consumers."

While Walmart has not commented on its African strategy, analysts suggest that it also be affected by the five-year investigation into alleged bribery of local officials in some markets as a way of greasing the wheels of expansion; Walmart knows that it is being watched for its processes, and may be attempting a more measured and transparent approach as a way of staving off criticisms.

• The China Money Network reports that Walmart "has increased its stake in Chinese e-commerce firm Inc. to 12.1% as of the end of 2016, up from 10.8% last October, deepening its partnership with China's second largest online shopping platform behind Alibaba ... Walmart is betting on as a major e-commerce channel for its future in China, where consumers are projected to spend up to US$6.4 trillion a year by 2025.
KC's View: