Tesco, the UK's biggest retailer, is planning to open its first Tesco Express store in Shanghai next month as it looks to tap into convenience shopping in one of the world's fastest-growing economies.

The chain, which formed a joint venture with a local operator in China in 2004, already operates more than 50 hypermarkets on China's east coast from Beijing to Shenzhen, and is planning to add smaller stores to its portfolio.

Tesco, lagging behind international rivals Wal-Mart and Carrefour in the race to roll out hypermarkets across China, has adopted a multi-format approach in some of its other markets such as Thailand, Hungary and South Korea. The retailer, which came to China nearly a decade after Carrefour, has earmarked the country as one of the markets, alongside Turkey and the US, that will be crucial to its long-term success.

In China, Tesco last year spent 180 million pounds increasing its stake in its local partner. China is one of Tesco's smaller overseas markets, but the retailer could spend up to 300 million pounds a year developing stores in this market if it opens 10 new hypermarkets a year, says Shore Capital in a recent report on Tesco's international businesses.

Tesco is increasingly looking to its 12 international businesses to drive growth. About 80 percent of group capital is being spent on overseas expansion against the UK, where it commands a 32 percent share of supermarket shopping. The international business, which accounts for more than half of group space, will increasingly become an important source of profits as those businesses mature.

The possible roll-out of dozens of small Tesco Express stores comes after the retailer opened its first branded store in Beijing a year ago as part of a process of putting its name above the shop doors of all its hypermarkets.

All three western retailers, Wal-Mart, Carrefour and Tesco, say that international branding goes down well with Chinese consumers.

Carrefour has more than 100 hypermarkets and nearly 300 hard discount stores branded Dia in China. Wal-Mart has 100 wholly-owned hypermarkets and an interest in a further 102 Trust-Mart stores after it struck a deal early last year to buy a 35 percent stake in the local chain.