Competition Among World Retail Giants Sharpens

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Last updated at: (Beijing Time) Friday, April 12, 2002

Competition Among World Retail Giants Sharpens

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German Metro, the world's third largest retailer after Wal-Mart and Carrefour, has opened a membership supermarket in the north China port city of Tianjin, spurring stiff competition among multinational retailers in the Chinese market.

The launch of the store, involving 17 million U.S. dollars in investment, was a significant decision for Metro, which will increase its purchasing business in north China this year, said Jeanluc Tuzec, president of Metro's Chinese business, at the on- going purchasing fair of international chainstore groups here.

With China's accession into the World Trade Organization (WTO), German Metro is stepping up its business in the country, planning to establish 50 chainstores in the next three to five years.

Statistics show that over 300 overseas-funded retail companies are doing business with Chinese partners, introducing some two billion U.S. dollars in capital.

Seventy percent of the world's top 50 retailers have brought business to China so far.

China's huge market has strong potential and the promising prospects are most attractive to the world investors, said Tuzec.

Figures show that China's retail market has kept growing at an annual rate of 10 percent over the past decade.

"China's opening-up in its retail market is in line with WTO rules, and offers unprecedented preferential policies to overseas investors," said Fang Aiqing, an official at the State Economic and Trade Commission.

The opening up strategy had entered a new era following the issue of "the Guiding Catalogue of Industries Open to Overseas Investors" in May this year, Fang added.

International retail giants were rushing to grab a larger market share under a broader and more open business environment.

The U.S.-based Wal-Mart, having contained its business scope to southern China over the past six years, declared on the eve of China's WTO accession that it would open another eight stores. Carrefour, based in France, has a total of 27 chainstores in China.

Apart from the fevered competition in opening more stores, international retail groups are also intensifying their procurement force.

The product purchased by Wal-Mart in 2001 were valued at 10.3 billion U.S. dollars, while Carrefour spent 3.5 billion U.S. dollars buying Chinese product in the same year.

Wal-Mart has moved its global procurement headquarters to Shenzhen, south China. Carrefour, taking China as its largest purchase base in Asia, plans to double the amount of purchased goods from China by 2003.

Domestic retail enterprises have woken up and are taking an active part in the competition with powerful foreign retailers. A large commercial chainstore group, made up of 13 domestic enterprises, has been founded in Beijing recently, in an attempt to counter the international competition.

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