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CHINA FRANCHISE NEWS
Vol. 4 , No. 4 - April 4, 2003
TOPICS THIS ISSUE:
- China Retail Sales Increase 9.2 pct in the First Two Months of this Year
- First Wal-Mart To Open In Shanghai By 2005
- Dicos Close Its Direct-owned Store In Beijing
- International Pharmacy Chain Launched in Shanghai
- Spanish Discount Store To Appear In China
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China Retail Sales Increase 9.2 pct in the First Two Months of this Year
According to the National Bureau of Statistics (NBS), retail sales in the first two months of this year are up 9.2% to 761.38 billion yuan, which was backed by strong spending during the Chinese New Year holiday on Feb. 1, compared with the 8.5% growth in the same period last year.
NBS further said that automobile sales were spurred by stiffer price competition among retailers and increased by 93.8%. Sales of telecom equipment including mobile phones were more than doubled and home appliance sales rose 13.7%. Food sales climbed 22.8%, as consumers stocked up for the New Year holiday. Retail sales in urban areas increased 10.7% to 496.76 billion yuan, while sales in rural areas rose 6.6% to 264.62 billion yuan.
All figures are for the first two months of the year. No breakdown was provided for January and February because of the seasonal impact of the New Year holiday.
Retail sales in the two-month period grew at the same rate as in December and the fourth quarter of last year. Over the one-week Chinese New Year holiday, sales from tourism rose 13% compared with the holiday period last year, with the tourists up 15.3%, the NBS said.
In a sample survey by the NBS, sales by 31 major retailers in Beijing grew 17% over the holiday period, which started on Feb. 1 this year as compared with the week-long holiday period last year, which started on Feb 12.
In the first two months of the year, retail sales in the wholesale, retail and trade sector increased 8.3% to 617.69 billion yuan. Sales in the catering industry rose 16.6% to 100.01 billion yuan, and retail sales in other sectors rose 6.7 pct to 43.68 billion yuan.
In the first two months of the year, garment sales increased by 13.2% and consumer goods, durable goods sales rose by 31%. Sales of tobacco and alcohol rose 21.3 pct, sales of beverages in the wholesale, retail and trading sector rose 29.2 pct, and sales of cosmetics rose 22.3 pct. Sales of books, magazines and newspapers rose 38.3%; sales of audio and visual products rose 17.9%. Sales of western and traditional Chinese medicines grew by 12.3%.
(Source: AFX European Focus)
First Wal-Mart To Open In Shanghai By 2005
According to the state press, US retailing giant Wal-Mart is planning to open its first store in China's largest city of Shanghai by early 2005.
Late last year, Wal-Mart signed a cooperation agreement with China's largest financial conglomerate China International Trust and Investment Corp. Group (CITIC) to open several stores in and around the eastern city of Shanghai. The Shanghai Daily reported that the first stores would be located on the first and second floors of the unfinished Dalian Wanda Commercial Plaza, with a total area of 18,000 square meters (193,700 square feet).
The report said that Wal-Mart planed to focus on its fresh vegetables and food products so as to differentiate itself from competitors. However, details of the deal signed last October by Wal-Mart subsidiary, the East China Wal-Mart Stores, have not been released.
According to rules stipulated by China's accession to the World Trade Organization, foreign companies are allowed to take stakes of up to 65 percent in retail joint ventures, but overseas retailers will be able to operate wholly-owned companies by the end of 2004.
Wal-Mart opened its first Chinese outlet in the southern city of Shenzhen six years ago and currently has 25 locations in nine Chinese cities.
Shanghai has over 300 registered retailing companies, a number of them of whom are foreign, including France's Carrefour, Japan's Jusco, Taiwan's Pacific Stores and Hong Kong's Kerry Group.
(Source: Agence France Presse)
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Dicos Close Its Direct-owned Store In Beijing
It was reported that the Dicos Fried Chicken Restaurant, located at the Asia Games Village, was closed in mid-March.
According to Mr. Deng Renrong, the coordinator of Dicos, the decision to close the Dicos Restaurant in the Asia Games Village did not indicate that Dicos will end its development of the Dicos Restaurant chain in Beijing. The decision to close was made mainly from a consideration of the chain's strategic development, as the investment in the Asia Games Village restaurant was big while its return small.
Dicos entered the Beijing market in 1997 and has opened four stores. Since 1998, however, three directly-owned restaurants were closed. Currently, only one franchised restaurant located in the Zhongguangcun area is still open.
(Source: Jinghua Times)
International Pharmacy Chain Launched in Shanghai
After opening six pharmacy chains in Shenzhen and Guangzhou of China's southern Guangdong Province respectively, one of the biggest franchise brands of drug retailing, Medicine Shoppe, opened three pharmacies in Shanghai this month. This is the first international franchise brand of a drug retailer to launch in Shanghai. According to management personnel, Medicine Shoppe's strategy in China will be using Shanghai as a gateway to enter into the Chinese drug retailing market and success in Shanghai will be a solid base for the further development within the China market.
On September 29, 2002, Medicine Shoppe signed a cooperation agreement with Shenzhen Nep-Star Drug Co. Ltd. to open its first pharmacy in Shenzhen and its professional-orientated services challenged the traditional management of the Chinese pharmacy market.
Medicine Shoppe was founded in 1970 and has an annual turnover of over USD $20 billion. Medicine Shoppe has over 1300 franchised stores all over the world.
(Source: Shenzhen Commercial Times)
Spanish Discount Store To Appear In China
On March 26, the executive president of Distribuidora Internacional De Alimentacion S.A. of Spain for Asia, Diego Cavestany, unveiled his company's plan to open 300 discount stores in China within the coming several years.
The company has signed an agreement with Lianhua Supermarket Co., Ltd, China's biggest retail enterprise, to expand its business in the Chinese market.
Price competitiveness is the selling point of this kind of discount store, which has become very popular in Europe and the United States.
They mainly sell medium-level commodities, including meat, eggs and vegetables, to middle-income consumers at prices 10% lower than those of supermarkets.
Distribuidora, a member of the Carrefour Group, owns 4,000 discount stores worldwide.
(Source: BBC News)
Lehman Lee & Xu
China Lawyers, Notaries, Patent, Copyright and Trademark Agents
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The China Franchise News is intended to be used for news purposes only. It should not be taken as comprehensive legal advice, and Lehman, Lee & Xu will not be held responsible for any such reliance on its contents.
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