Share
KUALA LUMPUR: The UK’s retailer heavyweight Tesco is making its presence felt in China with the opening of a 76,000 sq m multiplex housing a shopping mall, hypermarket and restaurants in the seaside city of Qingdao in Shandong province.
Launched last weekend (Jan 9 &10) and costing 500 million yuan (RM245 million), this landmark project for Tesco will represent a major milestone for the company which made its foray into the Middle Kingdom in 2004. About 50,000 shoppers turned up for the opening.
Tesco already has 71 hypermarkets and seven pilot Tesco Express stores in the country. This figure will grow to 82 hypermarkets by February. The retailer sees China as its most important and fastest growing overseas market.
"The freehold multiplexes will provide us more freedom in selecting better locations and also making better plans for supportive facilities -- for example, parking lots -- compared to the old model of renting properties," Paul Mercer, CEO of Tesco Property China said in the China Daily. It has been reported that Tesco is the first foreign retailer to construct freehold mall developments on this scale.
"Additionally, some of the freehold multiplexes will include apartments and home offices, so it will help us gather a stable group of shoppers," he added.
The company is banking that such malls will allow it to pull ahead of the pack in China’s increasingly competitive hypermarket segment. Tesco plans to invest £500 million (RM2.7 billion) in China this year. That accounts for one-quarter of total capital expenditure outside Tesco’s home base, and this ratio is expected to rise in the coming years.The other two major players in the country are Wal-Mart and Carrefour. Both have also made sizeable investments in China.
