Domestic retail firms are on the way to becoming retail giants in the sector in China, according to a list of top 30 chain store operators in the first half of 2004 published by the Ministry of Commerce.

The Shanghai Bailian Group, a merger of the Shanghai Lianhua Group and the Lianhua Group, the two biggest chain store operators in 2002, topped the list with a sales income of 30.4 billion (US$3.67 billion) in the first six months of 2004, a year-on-year rise of 23 per cent. It opened 432 outlets this year, adding the number to a total of 4,789.

The Beijing Gome, Suning Group, Dalian Dashang (Group) Co Ltd, and Carrefour (China) ranked from second to fifth on the list.

The statistics indicated that chain store operators continued to improve their scale and business performance, said a ministry official.

The top 30 chain store operators' total sales reached 170.5 billion yuan (US$20.6 billion) from January to June, up 38 per cent compared to the same time last year. The sales have accounted for 6.8 per cent of retail sales, increasing by 1.8 percentage points.

They opened 11,025 outlets by June this year, a 31.1 per cent increase.

Some 11 of the 30 companies had sales of more than 5 billion yuan (US$604 million) in the first half of this year, compared to seven in the 2003.

Many of the operators saw high growth rate, according to the official.

Eight companies realized a growth rate of more than 50 per cent in the number of their outlets, added the official. The growth rates of Shanghai Yongle Household Electronic Appliances Co Ltd reached 94.7 per cent, Dalian Dashang Group achieved 88.2 per cent, and Suning had 68.2 per cent.

Two companies, Qingdao Liqun Group Shareholding Co Ltd in East China's Shandong Province, Wenfeng Great World Chain Development Corporation in East China's Jiangsu Province, even increased the number of their stores by 121 per cent and 101 per cent respectively in the first six months. They both also doubled the number of outlets in 2003.

The quick expansion indicated that these chain store operators are busy enlarging their scale through mergers and acquisitions, joint ventures and franchising, the official said.

Apart from four companies, the majority of the 30 largest chain companies in 2003 remained on this year's list. "This reflects the fact that these companies have been more competitive and boast a steady performance," the official said.

He said many Chinese chain companies have become increasingly powerful, helping China to foster its own home-grown giants.

But foreign companies also witnessed fast growth due to the further opening of the nation's retail sector, although this rate is comparatively slower.

Five overseas-funded chain store operators entered the list, including Carrefour (China), Suguo Supermarket Co Ltd (7th), China Resources Vanguard Co Ltd (11th), Wal-Mart (China) (17th) and Jinjiang Metro (20th).

The total sales income of the five companies reached 27.15 billion yuan (US$3.28 billion) last year, rising 23.3 per cent and representing 15.9 per cent of the combined sales income of the top 30 companies. Their stores totalled 1,795 by the end of June, accounting for 15.7 per cent of the top 30.

According to the list, Carrefour now has 50 stores in China, having opened nine this year. Wal-Mart has 39, among which six opened this year.

The door will be opened wider to foreign retailers as China has stated clearly in its Administrative Measure on Foreign Investment in Commercial Areas that China will abolish joint-venture requirements and end restrictions on the location and number of foreign-funded stores after December 11 this year.

The official added that professional chain sellers of home electric appliances continued to be a prominent group on this year's list.

A total of six of these firms were on this year's list. Among them, the sales of Suning Group and Jiangsu Five-Star Appliance Co Ltd jumped by 100.8 and 102.2 per cent respectively in the period.

(China Daily August 6, 2004)