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| A Suguo Chain Store in Nanjing, capital of East
China's Jiangsu Province. (China Daily) |
National standards on the classification of retail business modalities,
to be implemented on October 1, will inform foreign investors that opening
up convenience stores, discount stores and small and medium-sized
supermarkets are preferable choices in China, which is to open the
industry up fully after December 11.
According to an official from the Ministry of Commerce, the national
standards give clear definitions on 17 retail business modalities, such as
convenience stores, large-scale supermarkets, members-only warehouses,
shopping malls, television shopping, vending machines and mail order.
For example, large-scale supermarkets are defined as "with a business
area of more than 6,000 square metres, serving a radius of two
kilometres".
However, in some cities there have been three or four hypermarkets constructed within a radius of
two kilometres.
"The specific classifications can help investors to identify their
business modalities and avoid overlapping
investment in retail business," the official said.
He said the standards will provide grounds for the ministry to map out rules governing cities'
commercial layouts .
The ministry has asked cities to submit commercial layout plans for
review. This move focuses on the opening of mega-stores, but it does not
have the legal impact of rules.
The rule was proposed by nearly 100 deputies to the 10th National
People's Congress in March this year, who submitted a proposal calling for
a legal framework for the establishment of mega-stores in major cities.
Wang Wei, a senior research fellow at the Development Research Centre
of the State Council, said the rule will suggest that convenience stores,
discount stores and small and medium-sized supermarkets will be better
choices for opening new retail sector businesses.
"We expect that the rule will give the right signal to this sector and
investors can find their right position by comparing it with the national
standards," Wang said.
Wang said small and medium-sized retail business are badly needed in
China while many investors are only focusing on hypermarkets or shopping
malls.
For example, research indicates there is room for between 3,000 and
5,000 convenience stores in Beijing.
Huang Guoxiong, a professor from the Renmin University, said that the
national standards were timely as China is set to further open up its
retail business sector.
China will abolish joint-venture requirements and end restrictions on
the location and number of foreign-funded stores after December 11 this
year.
They are currently required to operate through joint ventures in which
they can hold a maximum 65 per cent stake. And the stores can only be
opened in major cities.
(China Daily) | 
Updated: 2004-08-16 11:02