Shanghai’s municipal government has reportedly decided to merge the parent companies of China’s largest retailers to create a major retail group.

The merger involves the parent companies of Lianhua Supermarket Holdings, Hualian Supermarket Co, Shanghai No.1 Department Store and Shanghai Material Trading Centre, a Shanghai official told Dow Jones Newswires.

A holding company called Bailian Group will be formed through the merger and will be led by Zhang Xinsheng, the chairman of Shanghai Yibai Group, which is the parent company of Shanghai No.1 Department Store.

The move is aimed at putting Shanghai’s retailers in a better position to compete against foreign retail giants, such as France’s Carrefour, which have been rapidly expanding in China.