Foreign retailers expand in China

Foreign retail giants such as Wal-Mart Stores Inc and Carrefour SA are
stepping up their expansion in China to explore the less-developed
western and northeastern markets in a bid to gain a solid presence before
the country's retail market is fully opened next year.
Foreign retail giants such as Wal-Mart Stores Inc and Carrefour SA are
stepping up their expansion in China to explore the less-developed
western and northeastern markets in a bid to gain a solid presence
before the country's retail market is fully opened next year.

Carrefour SA, Europe's largest retailer which entered the Chinese

market in 1995, plans to relocate its headquarters for China's middle and
western areas to Chengdu, capital of Sichuan Province, from Shanghai.

"The headquarters director will leave for Chengdu next month," said Xia
Ying, a spokeswoman of Carrefour China.

Analysts say the office relocation indicates that Carrefour is trying to

consolidate its foothold in China's inner western region, which is
expected to be a new battlefield in the coming years amid fiercer
competition.

Currently, Carrefour has 10 hypermarkets in China's western region out

of its 41 outlets countrywide.

It plans to have a total of 70 such stores by the end of this year.

"Carrefour will increase its investment in China's western and

northeastern regions this year with more new stores to be opened," Xia
said.

In the northern region, Carrefour has opened five stores in Shenyang,

Qingdao, Dalian and Harbin. More stores are expected this year in the
area.

Meanwhile, Wal-Mart, the world's largest retailer, is also quickly

expanding in China's western and northeastern regions.

"In addition to the developed areas, Wal-Mart will step up investments

this year in China's western and northeastern areas," said a Wal-Mart
China official surnamed Zeng.

"China is calling for investments to develop its western and northeastern

areas and it will be a good opportunity for Wal-Mart."

Wal-Mart has opened four stores in Kunming and Nanchang in China's

interior area. In the northeastern region, it has opened seven stores.
Nationwide, it has 34 stores.

Germany-basedMetro AG said it will target the northeastern area,

preparing new stores in Dalian, Shenyang, Harbin and Changchun.

The world's third-largest retailer has pledged to open 40 new outlets in

the next three to five years in China. Currently, it has nearly 20 outlets.

Some foreign retailers started their foray into China's western hinterland
and northeastern region around 2000, hoping to score profits from the
less-tapped areas whose fund-strapped local governments went all out
to support them opening their stores there, according to domestic
industry insiders.

"The (west and eastward) trend will become more obvious this year,"
said Gu Guojian, director of Shanghai Chain-Store Research Institute.

"Foreign retailers are urged to gain a foothold in the less-tapped market

to gain a competitive edge when China's retail market is fully opened to
foreign investors in less than a year," he said.

Gu added that there's almost no competition in those markets, where

hypermarket business is basically an alien concept.

Besides, the foreign giants enjoy advantages, including approval

process and site selection, compared with domestic retailers in those
areas, he noted.