Post-WTO: City opens to more foreign retailers
(SUSAN XU)
03/15/2002
Government officials are still not able to confirm that US retailer Wal-Mart's is poised to enter the Shanghai market. "As far as I know, whether Wal-Mart will invest in Shanghai and when it will come is still indefinite," said Cai Hongsheng, director of Shanghai Municipal Commercial Commission. The firm has been thinking of entering the Shanghai market for some 10 years. "Everything should be decided by the retailer's strategy and the city's policy-making," Cai said. What is certain is that the Shanghai market will be more open to outsiders in the wake of China's entry to the World Trade organization. "Foreign retailers are paying more attention to the Shanghai market, which is a good opportunity for us," he said. According to incomplete statistics, over the past nine years, foreign investment in the city's retail sector topped US$1 billion. More foreign capital is flowing into the city through real estate and foundations as an indirect way of supporting the retail business. "It is also a must for local retailers to prepare themselves to meet the challenges of foreign giants now that we have entered the WTO," Cai added. Although the top three retailers are all Shanghai-based enterprises, if compared with foreign giants, their annual sales are small. To sharpen their competitiveness, the city government plans to launch an initiative to reorganize business and capital among large-scale enterprises to help them realize strategic alliances. For small enterprises, the government aims to help foster their development into chain businesses and logistics operations. There are about 30,000 small stores in the city with an average business area of only 20 to 30 square metres. "Some of them even can't be called standard stores," Cai said. The goal this year is to organize 1,500 such small operations into standard chain stores. In addition, the city is constructing a system to collect consumer information with the aim of helping enterprises react quickly to changing market conditions and forestall possible losses. The city government will continue to support the associations to introduce hearing systems into large supermarkets to help improve their regular operation.
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