6. Retailers in China
6.a Domestic Retailers
§ Shanghai Lianhua Supermarket is China’s leading retailer, and, with 1,225 branches, the Mainland’s largest supermarket chain. Its total turnover in 2001 was RMB 14.06 billion (GB£ 1.19 billion). In response to the likely influx of foreign retailers post-WTO accession, Lianhua aims to compete by instigating an ambitious expansion plan. It is looking to move beyond its base in Shanghai to develop a nationwide network of 6,000 outlets. In addition, the company is prioritising the development of non-supermarket format stores, including hypermarkets, convenience stores and discount stores. The company already has a presence in Beijing, and signed a contract to enter the Tianjin market in December of last year.
§ Hualian Supermarket is China’s fourth largest retailer, and second largest domestic supermarket chain in 2000. With 700 stores, it reported annual turnover of RMB 5.6 billion (GB£ 474 million) in 2000. It recently entered the hypermarket sector to take advantage of the nationwide market, and last year formed a venture with Xidan Department Store in order to expand through Beijing and northern China. As with Lianhua, it is looking to shore up its position nationally, and intends to further invest in stores in Nanjing, Guangxi, Inner Mongolia and Qinghai.
§ Shanghai Nonggongshang (Agriculture, Industry and Commerce) Supermarket ranks eighth among China’s top retail stores, and third among domestic supermarket chains. Its 145 stores reported a turnover of RMB 5.4 billion (GB£ 457 million) in 2000.
§ Sanlian Company deals in speciality food and beverage items. In 2000, its 90 stores reported a turnover of RMB 5.3 billion (GB£ 449 million).
6.b Foreign Retailers
§ Carrefour (France) is China’s leading foreign retailer, ranking third among the top 10 retailers in the country. With a strong presence in China, Carrefour operates nearly 30 stores in cities such as Beijing, Shanghai, Shenzhen, Tianjin, Nanjing, and Chongqing. Although the company has recently experienced problems with central government over approvals, these appear to have been only a setback, with the company recently announcing plans to open three stores in Heilongjiang.
§ Wal-Mart (USA) has 18 supermarkets, including three membership stores, in China. These are currently based in major cities such as Shenzhen, Dalian, Kunming, Fuzhou, Shantou, Dongguan and Shenyang. The company is currently coordinating the opening of five Beijing branches (and membership stores), and has announced its intention to open a further three stores in Heilongjiang. The world’s largest retailer, Wal-Mart now ranks ninth among China’s top 10 retailers. Recent reports suggest that Wal-Mart’s entry into Shanghai remains uncertain, pending government approval that may not be forthcoming. Nevertheless, the company’s decision to move its global purchasing headquarters to Shenzhen is a sign of its major long-term commitment to the country. Last year the company procured GB£ 6.89 billion-worth of goods from China.
§ Makro (Netherlands) has four cash-and-carry stores in China: two in Beijing, one each in Shanghai and Guangzhou.
§ Metro (Germany) has ten cash-and-carry stores in Shanghai, Xishan, Jinxian, Nanjing, Fuzhou, Qingdao, and Wuhan.
§ IKEA (Sweden) has two stores in China (Beijing and Shanghai), but plans to open one more in each city in the near future. Though popular, these have only just begun to break even, and IKEA has been forced to cut prices to meet Chinese market expectations.
§ Ito Yokado (Japan) now has two stores in Beijing, the most recent of which opened in December of 2001.
§ Pacific SOGO (Taiwan) opened its eighth department store last year, in Beijing’s Pacific Century Place. The company’s first store in the capital, it plans on opening another there later this year. Pacific SOGO already has three stores in Shanghai, two in Chengdu, and one each in Dalian and Chongqing. The company is rapidly establishing itself as the dominant foreign retailer in the department store sector.
§ Home Depot (USA) is apparently trying to enter the Shanghai market, with plans to open some ten to twelve stores around China. To date, however, the company’s overseas ventures have been less than happy: last October it sold all its stores in Chile to its JV partner, and it pulled out of Argentina after less than a year in the country.
§ Costco (USA) has been rumoured to be entering the China market for at least a year now. The company is supposed to have signed a contract with a domestic partner, and has plans to open ten warehouse stores in China. It already has stores in Taiwan, Korea, and Japan, so a move into the Mainland would be a logical next step.
6.c UK Brands
§ Dunhill was one of the earliest international brands to enter China, and remains a leading luxury brand in the retail sector. The company currently has over 55 outlets in 35 cities across China, predominantly focused on high-end department stores, hotel lobbies and malls.
§ B&Q Plc announced in October 2001 that it will open 58 chain stores in more than 30 cities by 2005. B&Q has so far set up stores in Shanghai, Tianjin, Nanjing, and Hangzhou, as well as other cities. B&Q and Kingfisher Plc annually purchase construction materials (hardware and tools, electric appliances and general merchandise) from China worth US$1 billion (GB£ 700 million) and sell them through their worldwide stores. In August 2001, the Bank of China (BoC) signed an agreement with B&Q China under Kingfisher Plc, to establish a partnership whereby the BoC will offer the company a complete set of financial services. B&Q is paying close attention to efforts by its rival, US-based Home Depot, the world's largest home improvement retailer, to enter the China market in Shanghai.
§ Tesco is intending to expand into China this year, with a focus on Guangdong Province. The company, which is active in Thailand and other parts of Asia, has yet to finalise a partnership.
§ Other British retailers have a China presence, in some cases without their knowledge or consent. Counterfeited goods are a commonplace shelf item, and products of numerous British retailers who have yet to officially enter the market can be seen on department store shelves. This is particularly true of the cosmetics and body care goods sectors.
