As part of its global expansion strategy, The Home Depot Inc. has agreed to acquire The Home Way, a home improvement retailer in China. The transaction has received Chinese government approvals and is to close by year’s end. Terms were not disclosed.
The Home Way, founded in 1996 and based in Tianjin, was the first big box home improvement retail chain in China, with stores averaging 90,000 square feet of selling space. The Home Way operates 12 stores in six Chinese cities.
While Home Depot, Atlanta, opened a business development office in China in late 2004, the deal with The Home Way is expected to accelerate the company’s understanding of consumers and retail operations in the Chinese market.
The Chinese home improvement market is valued at nearly $50 billion, growing at a compounded annual rate of 20 percent. About 70 percent of home improvement spending in China is for the completion of interior space in new homes. This represents a growth opportunity for Home Depot based on its strength in merchandise and services geared to finishing out a home.