Wal-Mart seeks entry into Korean market.

American discount retailing giant Wal-Mart is reportedly considering making an independent entry into the Korean distribution market rather than undertaking a joint venture with a local company.

Informed industry sources said yesterday that Wal-Mart appears to have decided to work independently, viewing the potential of the Korean market as great and its foundations in the field as strong.

A number of Korean companies, including Samsung, Daewoo and Lotte, have been courting Wal-Mart, with an eye on joint ventures but the latest reports indicate that the American enterprise is conducting its own feasibility studies.

The sources said Wal-Mart officials in fact are already engaged in the procurement of real estate for the establishment of distribution outlets in various parts of the country.

They explained that Wal-Mart is apparently studying adopting a unique accommodation of both members, who tend to be big consumers, as well as non-members in its distribution system.

"It appears that Wal-Mart has come to the conclusion that it will be more profitable to work independency since it has all the tools necessary to succeed in the local market," one industry official said.

Min Chung-ki, a director of the Korean Chamber of Commerce and Industry, said it would be advisable for Wal-Mart to seek partners in a venture here because of the different characteristic of Korean consumers.

"However, with the complete liberalization of the distribution market next year it will be possible for Wal-Mart to work independently, posing a considerable threat to existing establishments," he explained.

Indeed, many industry watchers said Wal-Mart, with its enormous financial power and decades of accumulated know-how in the field, it certain to have a major impact on the way products reach consumers.

Wal-Mart, with more than 2,500 distribution outlets across the United States, posted a turnover of 86 billion dollars and a net profit of 4 billion dollars last year, making it the largest business of its kind in the world.

The operation of discount stores for apparel and daily necessities is quickly catching on and a number of local companies such as New Core and Shinsegae Department Stores are engaged in the lucrative trade.

With the increasing volume of imports, however, companies like Wal-Mart stand to have a strong edge in the operation of such stores and Korean companies must find the means to increase their competitiveness.

At present, a number of foreign retailing companies, especially convenience chains like Seven Eleven, are operating hundreds of joint ventures here with domestic companies.

The latest of such ventures has been set up by Cafeur of the Netherlands and the project to open a number of stores in locations like Ilsan in Kyonggi-do and in Inchon is well under way.