Wal-Mart, the world leading retailing enterprise, formally entered the Beijing market yesterday after it inked a contract with Beijing Zhongshan Weiye Investment Co Ltd to open its club store in Shijingshan in the west of Beijing.
Tom McLaughline, vice-president of merchandising and marketing for Wal-Mart China Co Ltd, said the Shijingshan club store is the first chain store for his company in Beijing. Wal-Mart also plans to open another club store and three shopping centres in the capital city within several years. The new stores will be established as joint ventures or co-operation firms.
The total investment for the five stores is estimated at US$25 million, US$6.5 million of which will come from foreign partners, and the business areas of the chain stores are to cover 80,000 square metres.
The contract was signed during the Beijing Forum 2001 for International Distribution Modernization.
Thirteen Beijing enterprises, involving seven chain retailing enterprises and six investment companies, also signed a deal at the forum to jointly establish a multi-fund company - Capital Chain Commerce Shareholding Group. The enterprises created the new group, which will boast 1 billion yuan (US$120 million) in capital and 500 stores, in an effort to confront the challenges from foreign competitors and enhance the comprehensive competitiveness of domestic enterprises.
"Mergers and reorganization of the current commercial enterprises will increase the integrated competitiveness of domestic retailers, which will help them to compete with the international competitors in the world market and meet the requirements of China's accession to the World Trade Organization," Tang Long, deputy secretary-general of the Beijing municipal government, said.
According to the new group's plan, its annual sales volume is expected to exceed 20 billion yuan (US$2.4 billion) and the number of chain stores will be expanded to 1,500.
Two other agreements between Beijing and Taiwan retailing firms were also inked at the two-day forum which ended yesterday.
Some 23 commercial projects involving US$710 million in investment were promoted during the forum, and the four inked contracts were totally valued at US$193 million.
(China Daily November 8, 2001)
