Challenges to China's Retail Sale on Rise from Abroad

Home>>Business

Last updated at: (Beijing Time) Tuesday, October 29, 2002

Challenges to China's Retail Sale on Rise from Abroad

Statistics by concerned departments tell over 50 half of world's 50 biggest retail giants that have entered China. Though with a mere 3 percent turnover of China's retail sale they already have claimed the highest economic gain. Outstanding are over 300 foreign-funded retail giants with a 10 percent more of profits reaped from specific areas in which they are engaged.

DISCUSSION

CHINESE

SEND TO FRIEND

"Land enclosure" on by World Retail Giants

News reports about foreign retail giants challenging China's retail sale are no lack since after China's WTO entry. An example is Carrefour with about 30 business establishments already launched in 16 Chinese cities. With a letter of intent signed it is lately reported going to launch a Tianjin Quanyi Carrefour Supermarket Co. Ltd with its Chinese counterpart Tianjin Quanyi and ready to take over four auxiliary supermarkets from the latter. When should this be approved Carrefour would have the first batch of Chinese retailers merged on a big scale. Auchan is another from France known to have opened four Chinese supermarkets in China's Shanghai, Wuxi and Suzhou. Meanwhile, a plan has even been underway by this French retail giant going to launch 21 new supermarkets in China by 2004.

Statistics by concerned departments tell over 50 half of world's 50 biggest retail giants that have entered China. Though with a mere 3 percent turnover of China's retail sale they already have claimed the highest economic gain. Outstanding are over 300 foreign-funded retail giants with a 10 percent more of profits reaped from specific areas in which they are engaged.

Booming Retail Sale in Crying Need

China has made great advances and improvements in circulation and business operation since launching reform and the drive of opening-up. But there still remains a far cry by their magnitude, operating gains and economic returns when compared with those abroad. Statistics from the State Economic Planning Commission tell a sum total of 736.96bn yuan retail sale by China's 30 largest commercial enterprises in the first half of this year. In contrast, a single Wal-mart achieved a total of over US$200bn. Chain enterprises in China are found being run merely with an average of 14 branch units while an ordinary chain conglomerate abroad may have several hundred trading auxiliaries to operate. Last year, a 53 percent increase was reported in the number of business operations and a 58 percent growth in operating area and meanwhile a per-capita 9,000 yuan drop of profits and 2,200 yuan less per-operating area gain by 69 largest chain conglomerates in China. This speaks of the low undeveloped level of China's retail sale and the necessity for a booming retail market to be speedily developed and all local trade barriers and protectionism to be thoroughly eliminated.

"Dance with Wolf" to Become Ably

To conclude, this is the view of Huang Guoxiong, professor with the People's University in Beijing. It's natural for a portion of market share won by some foreign enterprises since they made their entry in China, he said. But to seek market dominance especially that of China depend not merely on a few dozen or several hundred of chain establishments. "China's vast market must be China run" he was quoted as saying: We must see to it that expertise be enriched, capability raised, strong steps taken to create more new "Wal-marts" and Carrefours or Auchans of China make. Moreover, foreign contestants may "do in Roman as Roman does" to fight for a market share in China. All possible measures must be adopted and new services provided for a full booming home market to be developed irrespective of "land enclosing" challenges from foreign competitors in China.

By People's Daily Online

Questions?Comments? Click here

China's Spacemen Expected to Dart off the Earth in Three Years ( 10 Messages)

China May Outstrip US as World's Largest FDI Recipient: UNCTAD ( 40 Messages)

President Jiang Holds Talks with US President Bush ( 6 Messages)

"China to Replace US as the Engine for World Economy": Interview ( 10 Messages)

Taiwanese Lawmakers Propose Charter Flights to Chinese Mainland ( 4 Messages)