BEIJING — The world's biggest retailer is flexing to take a billion-dollar leap forward in the world's biggest market. While both parties decline comment on the deal, media reports say Wal-Mart will buy Trust-Mart, one of China's leading retailers, to jump-start its sometimes faltering efforts to win over China's 1.3 billion consumers.

Wal-Mart already runs 66 stores in the People's Republic, but the purchase of Trust-Mart, a Taiwanese-owned retailer with more than 100 stores across China, could leapfrog the Arkansas-based giant ahead of French firm Carrefour, currently China's most successful foreign retail chain.

Reuters and publications including The Wall Street Journal and The New York Times have quoted unnamed sources saying that Wal-Mart has agreed to pay about $1 billion to buy Trust-Mart's China business, a hypermarket chain store spread across 20 of China's 31 provinces. He Delai, spokesman for Shanghai-based Trust-Mart, refused to comment on the Wal-Mart tie-up but said, "We are constantly revising our development strategy."

If the deal goes through and secures government approval, which could take until year's end, Wal-Mart will follow fellow U.S. retailer Best Buy in buying its way into a greater share of the world's most-populous country.

"Acquisition offers a fast and easy way for foreign companies to get entry into China's retailing market," says David Lung, partner at the retail and consumer products practice of Ernst & Young in Beijing.

"Based on our research, around 80 percent of retailers in China are traditional, family-run style," Lung says.

"Only 20 percent of the market are in organized format, so it offers many opportunities for consolidation. Wal-Mart's acquisition of Trust-Mart is part of this trend."

In August, electronics retailer Best Buy bought a 75 percent stake in Jiangsu Five Star Appliance, China's fourth-largest appliance and electronics retailer, for $180 million, Lung says.

Wal-Mart's bold China play is "no surprise," says Paul McKenzie, retail analyst and head of consumer research at CLSA in Hong Kong.

"After pulling out of South Korea and Germany, and with a stated policy of expanding aggressively in China, this is a quick way for them to expand, grab greater purchasing power and expand logistical capabilities," he says.

But don't expect this billion-dollar buy to solve all of Wal-Mart's China woes, says Paul French, a Shanghai-based retail analyst.

"Before Wal-Mart leapfrogs Carrefour, they must get their strategy right as their stores are underperforming," says French, publishing director for Access Asia, a market intelligence firm.

What are Wal-Mart's China problems? Take basket size, French says. While the average price of a U.S. basket of goods is more than $20, Wal-Mart in China averages $4 to $5, at local retailers, which is "pathetic for anywhere," French says. Then there are "slotting fees," the price brands pay for shelf space. While China's top domestic retailers, such as Lianhua, earn 25 percent to 40 percent from this practice, Wal-Mart's refusal to adopt this method "hurts their overall performance," he says.

American pride is another major factor, says Hu Xueqing, director of the chain-store management department at Shanghai Business School.

"Wal-Mart has been stubborn, proud of its own management methods, and has not localized its operations as well as Carrefour," Hu says.

Cultural errors include Wal-Mart's infamous attempt to sell dead fish to the Chinese, a society that values freshness above all, whereas Carrefour sold live fish in tanks from the outset, French says.