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Chinese Investors Enthusiastic in Chain Store Business
"How much I shall pay if I join you?" a man in his 30s asked at the exhibition section of an Italian company making suits for children.
The man was among streams of Chinese people who hoped to become rich and flocked into the hall of the Beijing International Convention Center, to search for secrets of business success at this franchise fair.
Although it was the third occasion for such a fair to be staged in the Chinese capital, it was still successful in luring thousands of Chinese arriving for chances at the idea that the country would soon be admitted into the World Trade Organization, probably at the end of this year.
Names of potential investors were set on the signatory albums and desk of every franchiser. These investors came from every corner of the country.
"We plan to open only eight chain stores in Beijing," shouted a young woman who, besieged by inquirers, handed out her color booklets quickly.
At a seminar on franchise opportunities, a senior official of McDonald's franchise department showed off the company's glorious expansion in the United States through franchise and in China it has opened 340 stores across the country.
Last year 11 chain restaurants were ranked in the top 100 Chinese chain enterprises, most of which had accelerated their business development by the way of franchising, including both historically famous shops and the latest successful restaurants as well.
Problems remained although prosperity was at hand. Many son-to- be franchisers wishing to get rich quick, complained that profits were less than they previously expected.
Available franchise programs for small investors were few. And those with cheap admission were not all assuring, which scared some investors away for lack of good management, training and support.
"Many domestic franchisers only care to make money by drawing in as many as people as they can, and will pay no attention to the development of self-owned know-how and a unique and efficient management system," said a marketing expert.
"Eight millions!" cried out a gray-haired old man when he was checking a qualification bulletin for admission to KFC (Kentucky Fried Chicken). The old man shook his head and walked off.
It was not surprising that such a big amount of money was unattainable for most Chinese -- 8 million yuan of Renminbi equals 964,000 U.S. dollars.
KFC's long rival, McDonald's, employed a different strategy in China. It rejected a genuine franchise style and resorted to cooperation with local big shops or capable individuals by buying or leasing their land or house property.
Retail sectors in the country was, with the catering industry, the first to try franchise for faster development in China, while foreign-funded retail shops slowed down their always fast-paced expansion other than in China since the country adopted policies curtailing such aggressive expansion that may endanger domestic retailers.
But China's impending entry into the World Trade Organization will force a loosening of government control on retailing. The country has committed to opening gradually its retail sector after the entry, and as a result more and more chain stores from outside China will have a finger in the pie.
Domestic successful retailers have taken steps for a battle for market shares. Shops like Hua Lian, Wu Mei, Chao Shi Fa and Guo Mei a giant home appliance distributor in Beijing, have announced their ambitious plans to expand. Franchise was, of course, among their best choices to speed up development.
Competition also came from Taiwan, for example, the drink shop Fairyland and the women's underwear producer Ordifen. Fairyland opened new shops one after another in downtown districts of Beijing, which, along with bustling customers for its swaying benches and drinks with bizarre names, proved a successful business development.
Foreign franchisers were turning to eye the market in China, too. Other than pioneers like McDonald's and KFC, progressive newcomers were exemplified by Dairy Queen's ice-cream shops and Starbucks cafes -- the latter even opened its cafe in the Forbidden City, the grand palace for Chinese emperors and a symbol of China's 1,000 year-long culture and tradition.
Although at the seminar groups of experts and entrepreneurs spoke with fervor about developing franchises in China, yet everybody understood it was not a simple thing and needed time as we all know McDonald's and KFC have sold their western style fast food for almost half a century.
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