Shanghai: Retailers mull expansion
( 2002-08-12 09:48 ) (1 )

Shanghai's retail businesses want to accelerate their expansion around China in the face of increasing pressure from local and overseas competitors.

Lianhua Supermarket Holdings Co Ltd, the country's top retailer based in Shanghai with around 1,500 chain stores and expected sales of over 17 billion (US$2.1 billion) this year, is looking to add in excess of more than 4,000 stores nationally in three years, according to Liang Wei, the company's general manager.

The stores will be built in more than 10 provinces, municipalities and autonomous regions, mainly in big cities along the country's coast from north to south.

Liang said in an interview that the company had highlighted expansion as its number one priority since last year.

"The pressure is great, especially from overseas retailing giants," Liang said.

"A successful supermarket must be giant and Lianhua is currently committed to becoming larger so it can save on costs and increase its interests," Liang said the company wanted to have 6,000 chain stores by 2005.

Meanwhile, the city's other leading retailer, Hualian Group, has made a successful debut in northern parts of China by co-operating with its business partners in Beijing, company representatives said.

Hualian, a listed commercial conglomerate concentrating on department stores, would continue to expand its profitable supermarket business nationwide in a push to become China's "Wal-Mart" within five years.

Chao Gangling, a professor with the Shanghai University of Finance and Economics, said in a recent interview that domestic retailers, which mostly limited their businesses to certain regions, had to turn into national enterprises so they could cope with the competition from overseas counterparts.

"No scale, no interests," Chao said. "It is a consensus reached by the retailers worldwide."