Shanghai Hualian Supermarket is consolidating its presence in the Chinese supermarket trade by forming a venture to build as many as 500 new supermarkets in northern China.
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Hualian, which operates 682 supermarkets in Shanghai, will invest 9m yuan (US$4.7m) for a 77% stake in Beijing Xidan Hualian Supermarket. Beijing-based Xidan Market will own 20% of the venture, while Beijing Chaoshifa will own the remaining 3% stake.
Xidan Hualian plans to build 100 new supermarkets in Beijing, and another 400 supermarkets throughout northern China, in a move aimed at fending off competition from foreign rivals such as Wal-Mart Stores. The Chinese service sector will be open to foreign competition as part of its entry to the World Trade Organization.
US-based Wal-Mart has a small presence in China, having has so far established 11 outlets located mainly in southern Chinese cities, including Shenzhen, Dongguan, Kunming and Dalian.
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By GlobalData
