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SAO PAULO (Reuters) - Wal-Mart Stores Inc branched out into electronic commerce in Brazil on Thursday, unveiling a website it hopes will extend its reach across the vast country, where consumer demand is booming.
The foray into e-commerce is part of an aggressive expansion strategy in Latin America's largest country, where the U.S. retail giant is spending millions of dollars and racking up sales growth at more than twice the pace than in the United States.
"Brazil is a strategic market for Wal-Mart, and being in e-commerce is a key part of our growth strategy here," Hector Nunez, Wal-Mart's chief executive in Brazil, said at a news conference at the retailer's headquarters on the outskirts of Sao Paulo.
Wal-Mart, which opened its first store in Brazil in Sao Paulo in 1995, now has 322 outlets in 17 of the country's 26 states. It is also looking to expand into the vast central states where it is absent.
The discount behemoth expects to open 24 more stores in Brazil by the end of 2008, part of 1.2 billion reais ($544.7 million) in investments earmarked for the year. In 2009, it plans to spend up to 1.8 billion reais ($984 million) to open 80 to 90 more outlets.
Wal-Mart spent 25 million reais ($13.67 million) to develop its Brazilian e-commerce site, www.walmart.com.br. Nunez said the site will offer the lowest prices among online retailers in Brazil, where electronic commerce has been growing more than 30 percent annually in recent years.
Asked if the prospect of an economic slowdown in Brazil posed a threat to Wal-Mart's expansion plans, Nunez said the company was confident its low-price model would continue to attract consumers, even in the event of a downturn.
"We are going to continue with our expansion plans and we are going to continue investing in this country," he said. "Consumption is still rising, and so are our sales."
Reporting by Todd Benson