Carrefour, the world's second-largest retailer, opened its first hypermarket in Northwest China yesterday in an attempt to further extend its business in the country's western areas.

The new store, Carrefour's 42nd hypermarket in the country, is located in the Grand Bazaar commercial centre in Urumqi, the capital of the Xinjiang Uygur Autonomous Region.

"Investment into Urumqi is an important step for our development in western China," said Carrefour China President Jean-Luc Chereau at the opening ceremony of the Grand Bazaar store.

With significant recent local economic development, Urumqi offers a great market for retailers, he said.

The new store, with a total investment of US$20 million, is jointly operated by Xinjiang Carrefour Hypermarket Co Ltd, Xinjiang Grandscape Investment Co Ltd and the Shenyang Beitai Fangxiang Group Co Ltd.

The French retailer holds a majority 65 percent stake - the maximum share foreign retailers are allowed to own in China, while the other two Chinese firms control the other 35 percent.

Covering a selling space of 6,500-square-metres, the new store provides more than 15,000 different products to consumers in Urumqi.

All of the fresh goods and about 50 percent of the other products are purchased from local suppliers throughout the city and the region, to meet the demand of local consumers, store sources said.

Eyeing a sizable market with a population of more than 2 million, Carrefour is to open its second store in the city in September or October of this year.

Yesterday's opening of the new franchise is not only a beginning for Carrefour's business expansion in Northwest China, but is also of great importance for its future development throughout the country, as it symbolizes the company has finished its restructuring of the Chinese interests.

Around three years ago, the retailer was found to have infringed upon rules regulating foreign retail enterprises in China and was ordered to sell its excessive shares upon the 65 percent limits to local partners.

"Through two-and-a-half years' efforts, we have completed our revamp in China, and we are happy to see the central government is giving us green light for our business expansion again," Chereau said.

During the past two years, Carrefour was informed it was allowed to open a new store only when it finished restructuring of its existing ones.

But now, the company is ready to speed up its business expansion.

After the opening of the new Urumqi store, another two hypermarkets will open soon in Beijing and Jinan, when the Ministry of Commerce gives permission to the company's applications.

It had also applied for the opening of its Champion fresh stores in Beijing and Shanghai.

If successful, the retail giant will bring its three major branded-stores in China, with Carrefour in hypermarket category, DIA in the discount store range and Champion as its supermarket entry.

Since more and more foreign retailers are gaining footholds in China as the country lifts its limits on the industry, Carrefour is eager to expand and accumulate more of a market share, according to analysts.

(China Daily February 18, 2004)