CHINA FRANCHISE NEWS
Vol. 3 , No. 3 - February 28, 2002
TOPICS THIS ISSUE:
- Poor Distribution and Small Capacity Hurt China Chain Store Business
- Guomei Electronic Appliances Seeking IPO in Hong Kong
- Public Hearings for New Bulk Retail Stores and Logistics Centers in Beijing
- Kodak Secures Financial Aid for its Franchisees
- Carrefour to Set up 10 Purchasing Centers in China this Year
- Golden Elephant Opens its 20th Nonlocal Chainstore
Poor Distribution and Small Capacity Hurt China Chain Store Business
Mr. Huanghai, director of the Trade Market Bureau of the State Economic and Trade Commission, diagnoses two negative factors hindering the development of China's chain stores: narrow geographical distribution and small capacity.
Currently, China's chain store operators are concentrated in the eastern coastal areas and big cities. For instance, the chain stores in Beijing yielded total retail sales of 20.89 billion yuan (US$2.52 billion) in 2000, accounting for 14.5 per cent of the city's total retail sales; the sales of the chain stores in Shanghai reached 36.47 billion yuan in 2000, making up 21.2 per cent of the city's annual retail sales. In some western provinces and regions, however, the annual sales of chain stores amount to only 200-300 million yuan.
Small scale is another problem restraining the development of the chain store sector. By the end of September 2001, the 1146 major chain store enterprises and catering trade enterprises in the country each had an average of fewer than 23 stores, and the enterprises each with more than 10 stores accounted for only 45.3 per cent of the total number of chain store enterprises in the country.
(Source: Asia Pulse)
Guomei Electronic Appliances Seeking IPO in Hong Kong
Beijing Guomei Electronic Appliances Co Ltd, a home electronics retailer headquatered in Beijing, will be listed on the Hong Kong stock market later this year. As the biggest electronic retailer in Beijing, Guomei generated sales of almost 7 billion yuan (US$850 million) last year, more than doubling the 3 billion yuan (US$360 million) in 2000, and its profits in the first half of last year exceeded 100 million yuan (US$12 million).
By the end of last year, Guomei owned 48 self-funded and 37 franchise stores all over the country. According to Mr. Li, the vice general manager of the company, Guomei currently will focus its full efforts on business adjustments, including consolidating its present network and enhancing the efficiency of its shops. In the second half of the year, the company will resume its expansion, especially in southern regions of China.
(Source: China Daily)
Public Hearings for New Bulk Retail Stores and Logistics Centers in Beijing
Beijing Municipality is going to adopt an administrative hearing system for opening new bulk retail stores and logistics centers. When an enterprise selects a place for construction of bulk retail stores and logistics centers or other shops taking up large areas, it must go through a hearing held by governmental organs to listen to opinions of officials, experts, business setups and consumers in that community. If the enterprise cannot get a majority vote, it has to select other places instead.
Through this method, experts hope to prevent over-crowding and chaotic construction of commercial facilities and to achieve a more reasonable commercial layout.
(Source: CCFA news)
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Kodak Secures Financial Aid for its Franchisees
Kodak (China) Ltd. has completed a deal with the Bank of China (BOC) to finance Kodak's franchisees and would-be photographic business investors.
According to the Plan, the bank will provide a comprehensive credit line of 100 million yuan (US$12 million) for Kodak's franchisees. It will help speed up the capital turnover of the franchisees and the capital circulation in Kodak's distribution channels, said Li Junsheng, general manager of Kodak (China)'s Consumer Imaging Department.
Meanwhile the bank will offer loans to potential imaging business investors recommended by Kodak, for their purchase of the company's color film developing or imaging equipment. The service will be gradually provided in China's major cities through the bank's outlets nationwide.
Kodak believe the financial assistance will encourage more individual investors to set up Kodak stores.
(Source: China Daily)
Carrefour to Set up 10 Purchasing Centers in China this Year
France-based Carrefour has sped up its expansion in the Chinese market since last November after an agreement signed by Carrefour and the State Economic and Trade Commission (SETC) granted business approval to the retailer to put an end to a half-year restriction on its expansion in China.
Carrefour plans to open 10 chain stores every year and organize 10 purchasing centres in China, according to Mr. Chen Yaodong, the vice president of Carrefour (China). Besides purchasing centers in existence in Shanghai and Guangzhou, Carefour plans to set up purchase centers in Beijing, Tianjin, Dalian, Qingdao, Wuhan, Xiamen, Ningbo, and Shenzhen. All these 10 purchase centers will be under direct leadership of its French headquaters with Shanghai's purchase center as the coordinator.
Since 1995, Carrefour China has opened 27 stores in 15 cities with an employment of 16,000. In 2000, Carrefour China achieved sales of approximately RMB 8 billion (near 1 billion USD).
(Source: CCFA news)
Golden Elephant Opens its 20th Nonlocal Chainstore
Golden Elephant Drug Chain Store Enterprise, one of the drug retailers headquartered in Beijing, opened its 20th nonlocal chain store in Wuhai city last week. As the first batch of drug retailers approved for establishing multi-provincial chain stores, Golden Elephant has established 60 franchise stores in Beijing area and 20 chain stores in about 10 provinces.
China has undertaken to open up its pharmaceutical distribution service to foreigners from January 1, 2003. From then on, foreigners are allowed to engage in purchasing, storing, transporting, distributing, wholesaling, retailing and after-sale service. To help China's drug retailers better prepare for the coming competition, the government plans to support 10 famous drug stores to own at least 100 chain stores in 5 years. Meanwhile, the government will support a number of regionally famous drug stores to own 40-50 chain stores each.
(Source: the Economic Observer)
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