China will spur more industries to set up chain outlets in the
central and western regions over the next three years.
The State Economic and Trade Commission said the chain outlets,
which provide daily necessities under one roof, should be practiced
by the petrochemical, tobacco, books and newspapers, pharmaceutical
and telecom industries to promote their commodities and
services.
This is stipulated in the commission's blueprint for chain
operation development in the 10th Five-Year-Plan period (2001-05).
The blueprint was issued over the weekend.
In
addition to the above-mentioned industries, sectors such as
software development, auto sales, commodities leasing, education
and training, and tourism could benefit from opening chain
outlets.
Expansion would swell the operations of chains in China which began
to gain popularity in the early 1990s, said Guo Geping, chairman of
the China Chain Store and Franchise Association.
The plan estimates the number of chain stores will reach 100,000 by
the end of 2005 with total sales of 700 billion yuan (US$84.57
billion). This is in comparison with 21,000 stores with 155 billion
yuan (US$18.72 billion) in 2000, the last year of the Ninth
Five-Year-Plan.
The chain companies can transfer their business to the central and
western regions in ways ranging from mergers, acquisitions and
alliances to introducing trademarks and management, said Guo.
Well-run companies should incorporate existing stores in the middle
and western regions into their chain operations rather than open
new stores. This will avoid unnecessary competition and resource
waste, Guo said.
The blueprint showed China will open the chain store field wider to
foreign investors, especially in the middle and western
regions.
Regulations are being drafted that will make the current trial
opening of commercial industry official, Guo added.
The blueprint will help make the development of chain operation
more reasonable and diversified, said Guo.
The blueprint said the government will encourage business to open
more convenience store chains and medium-sized supermarkets, but
prudence should be exercised over the launch of hypermarkets and
warehouses.
Because of the blind expansion of some chain stores, many local
enterprises went bankrupt earlier this year.
(China Daily November 19, 2002)