Wumart, one of China's leading chain retailers, is trying to tap the department store sector, the company confirmed.

Wu Jianzhong, senior vice president of Wumart, disclosed that the first department store of the commercial giant, covering a combined business area of some 20,000 square meters, will be opened in Chengjian Plaza, a complex located in the populous North Third Ring Road of Beijing.

As the complex is still under construction, the first Wumart Department Store is expected to be officially launched by the end of September, according to Wu's optimistic estimation. Wu refused to reveal the operational details of the department store in terms of marketing strategy, business focus and consumer group targeting.

A source close to the company said that the manager of Wumart's department store sector will possibly be Guo Kai, the former general manager of Beijing's Xidan Department Store, one of the leading department store companies in China.

"The decision is based on Guo's rich experiences in the department store business," said the source.

A survey conducted by the Ministry of Commerce showed that Wumart was ranked the 12th largest retail company around the nation last year. It was the first Beijing commercial enterprise to be listed in the overseas market.

So far, the Chinese conglomerate operates hypermarkets, supermarkets and convenience stores around the nation.

Wumart announced in November 2003, when it became listed on the Hong Kong Exchanges, that the company was to open over 400 new outlets, including 10 hypermarkets, 32 supermarkets and more than 300 convenience stores in Beijing by the end of 2005.

Due to its rapid expansion in the recent years, Wumart's annual growth rate of sales volume reached 60 percent from 1995 to 2003. And its growth rate of net profit hit 76 percent and 156 percent in 2002 and 2003 respectively.

"To exploit the general merchandise market is necessary to supplement Wumart's current business," said Wu.

He believes that diversifying the business structure may help the enterprise avoid risk and make full use of various resources, including commercial talents, purchasing systems, sales network as well as the value of its famous brand.

The source close to Wumart disclosed that Wumart is looking into Fangzhang in the southern part of the capital city, and Xinjiekou in central Beijing, to select sites for its second and third department stores in Beijing.

"Wumart's move indicates that the giant is striving to enlarge its scale and become more powerful in a short period of time," said Fan Yanru, deputy secretary general with the retail enterprises committee of China Commerce Association for General Merchandise.

Faced with the gloomy conditions in China's department store sector to-date, Fan said that she hoped Wumart can introduce advanced operation technologies and rich experience into the industry.

(China Daily August 16, 2004)