CHINA FRANCHISE NEWS
Vol. 3 , No. 5 - March 26, 2002
TOPICS THIS ISSUE:
- Chain Stores Reshaping Retail Sector
- SETC Releases Annual Retail Market Figures
- Chain Store Exhibition Fair To Be Held In Tianjin
- Pakistani Restaurants Invited To Set Up Shop in China
- Uni-President, Japanese And Chinese Investors To Open Mainland 7-Elevens
- Western Brands Exert Powerful Influence Over Traditional Chinese Lifestyle
- US Potato Imports to China's Fast-Food Market Jumps 130%
Chain Stores Reshaping Retail Sector
The enormous growth last year of China's chain store sector shows that they will play a major role in the restructuring of the country's retailing sector.
Yan Xianpu of the National Bureau of Statistics reported that by June 2001 there were 1,138 chain stores with over 25,000 outlets operating in China, achieving a mid-year turnover of RMB 102.41 billion (US$ 12.38 billion). He also said that chain stores are taking a larger share of the market, previously under the control of traditional department stores.
The State Economic and Trade Commission stated that it will devote major efforts to assist in the development of chain stores in the next 5 years, which almost certainly means the sector will experience massive growth in both the number of stores and outlets and in annual earnings.
The State Economic and Trade Commission went so far as to predict that by 2205, there will be over 100,000 chain stores in China, with an annual turnover of RMB 700 billion (US$ 84.6 billion).
(Source: Asiainfo Daily China News)
SETC Releases Annual Retail Market Figures
A recent report by the State Economic and Trade Commission (SETC) showed that the yearly sales volume of the 20 largest chain stores in China grew by an astonishing 43%. The number of outlets of the top 20 increased by 46.7%, while the entire retail market grew by 10.1%.
The SETC survey showed that the largest chain store is the Shanghai Lian Hua Supermarket Company, which with 1,225 outlets, posted RMB 14.06 billion (US$ 1.7 billion) in 2001.
The SETC survey noted that almost all of China's large chain stores are headquartered in Eastern China, but that expansion into the western areas is certain in the future.
The survey noted that domestic retailers, like Hua Lian and Guo Mei, are preparing to compete for market share with foreign retailers as the market is opening due to China's WTO accession.
(Source: IPR Strategic Business Information Database)
Chain Store Exhibition Fair To Be Held In Tianjin
A fair aiming to help establish new trade relations between global chain store groups and domestic manufacturers will be held next month in Tianjin.
The fair, referred to as the China Tianjin International China Store (Global Sourcing) Fair will be held from April 9th to 12th. The Vice-mayor of Tianjin, Wang Shuzu, said the fair's aim is to lower the costs of both manufacturers and importers by keeping intermediate links to an absolute minimum.
Industry analysts expect that the moves of international chain store groups to increase their presence in China will follow closely after China's entry into the WTO, due to tariffs being cut.
As the international chain store groups expand in China, it is a great opportunity for domestic enterprises to enter the global market by supplying the groups with domestic goods. As an example, France's Carrefour Group bought over US$ 3 billion worth of goods in China.
The fair will be held at the newly built Purchasing Centre for Exported Goods in the Tianjin Free Trade Zone. Roughly 500 global chain store groups have been invited to participate. Carrefour, Wal-Mart and Kingfisher have all confirmed they will send purchasing staff.
Over 500 booths will exhibit more than 2,000 types of foods, textiles, stationery, sporting goods, handicrafts, household appliances, and daily necessities. Fair organizers said the fair is promoting a win-win purchasing method and it will help in establishing Tianjin as the largest purchasing base for exporting goods in Northern China.
A similar fair will be held in Nanjing, the capital of East China's Jiangsu Province in late April.
(Source: Business Daily Update)
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Pakistani Restaurants Invited To Set Up Shop in China
An official with the Ministry of Foreign Trade and Economic Co-operation (MOFTEC), said that Pakistani businesses are welcome to set up restaurants in China.
The official went on to say that offering traditional Pakistani food could be a good business in the food and beverage industry, as Chinese people are increasingly trying the foods of different nationalities.
The food market in China has boomed in recent years, with hundreds of fast-food chains expanding. McDonald's, KFC, Subway, Domino's Pizza, Popeye's Chicken, Kenny Rogers Roasters, Pizza Hut, TCBY and Dairy Queen have all established a strong presence in Mainland China.
Although restaurants have been set up by businesses based in the USA, France, Italy, Greece, Lebanon, Russia, Japan and India in various major cities in China, there has yet to open a single Pakistani restaurant in China. A Chinese businessman living in Pakistan said that "Pakistani traditional food could be equally popular here."
An official from the Bureau of Statistics said that the sales volume of China's restaurant industry in 2001 amounted to US$ 52.4 billion, up 16.4% from the previous year. The Bureau of Statistics reported that the sales volume of China's restaurant industry totaled US$ 52.4 billion in the year 2001, up 16.4% from the previous year.
Industry experts credit the prosperity of the restaurant industry to increases in individual incomes, changes in consumer habits and development of the tourism sector.
Han Ming, Chairman of the China Hotel Association, said that improvements such as better technology, better service quality and centralized purchasing and unified distribution also contributed to the success of the restaurant industry.
(Source: Business Recorder)
Uni-President, Japanese And Chinese Investors To Open Mainland 7-Elevens
Uni-President Group announced that it will establish a joint venture with the largest shareholder of 7-Eleven Inc., and other mainland Chinese investors to set up 7-Eleven chain stores in Beijing and Shanghai.
C.Y. Kao, chief executive of the Uni-President Group, said that a Japanese company will have the majority of shares, while the Uni-President Group will only take a minority share.
Kao said the joint venture will open its first store in the first half of 2002. Although the group has already established manufacturing plants in mainland China to produce products like instant noodles and dairy products for the domestic 7-Eleven stores, high-end beverages and food products produced in Taiwan will also be exported to the mainland's 7-Eleven stores in the future.
(Source: Taiwan Economic News)
Western Brands Exert Powerful Influence Over Traditional Chinese Lifestyle
Housewife Chang Zheng in Guangxi Zhuang Autonomous Region in China, dines with her family at Kentucky Fried Chicken, with her daughter who dyed her hair blond. She even says "bye-bye" instead of "zai jian", the Chinese traditional way of parting.
Incoming western fashions and lifestyles are flooding the country, whose citizens are usually thought of as proud and unwilling to let go of their traditional culture and millennia-old way of life. However, as Zhou Keda, a professor with Guangxi Academy of Social Sciences, says, "a competition between Chinese traditions and western lifestyles is underway in China." "Chinese people are now picking up new things as easily as a sponge absorbs water," he adds.
For those growing up during the beginnings of the open door policy during the 1970s and 1980s, brand names such as KFC, Philips and Coca-Cola are part of their daily vocabulary.
A recent survey showed that 29% have watched western movies, 11% have read western publications and 10% have purchased foreign high-tech products.
Despite some people being worried about the loss of ancient traditions passed down from countless generations, experts say it is still early to judge whether or not Western fashions and brand names will exert a negative impact on Chinese traditions.
"Rapid development will certainly bring China things that are beyond immediate evaluation. However, it is absolutely undeniable that the lives of Chinese people have been considerably improved during the past two decades," said Zhou Keda.
(Source: Xinhua News Agency)
US Potato Imports to China's Fast-Food Market Jumps 130%
The amount of US potato products that China imported last year, primarily consumed by fast-food franchises such as McDonalds and Kentucky Fried Chicken, rose by 130% from last year.
The US Potato Board announced that in 2001, China imported 46,106 tons of potato products from the United States, amounting to a total value of US$ 35 million.
(Source: Infoprod)
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