ChinaRetailNews.com Editor – The world’s leading convenience store chain 7-Eleven has announced that it will open two outlets in Chengdu on March 17, 2011, for its entry into this new market in China.

With a total investment of USD65 million, 7-Eleven’s subsidiary in Chengdu has been founded with the registered capital of USD30 million. According to its expansion schedule in Chengdu, the convenience store chain will first launch two stores in March; it will open 15 stores during the following three months; it will develop 50 stores within one year; and it will have 350 stores in the marketplace over five years.

By its layout plan, these 350 stores will be mainly located in the five districts of the main city as well as the high-tech region. At present, locations of seven stores have been decided and sites of another 15 stores will be determined soon. During the initial expansion period, 7-Eleven Chengdu will focus on the development in Jinjiang district, Wuhou district, and Qingyang district, and stores will be close to office buildings, business areas, and schools. — Read more at ChinaRetailNews.com…

BEIJING (China Daily) – Boeing plans to double the size of its composite material production factory in Tianjin by early next year as demand grows and the global aviation market recovers, an executive with the US manufacturer said on Wednesday.

The Boeing 787 Dreamliner sits on the tarmac at Boeing Field in Seattle, Washington after its maiden flight, in this Dec 15, 2009. [Photo/Agencies]
“Our Tianjin factory’s work place is full with 600 employees now. We have to enlarge the place because the needs of commercial airlines is growing fast,” said David Wang, president of Boeing China.

The factory, known as Boeing Tianjin Composites Co Ltd, now produces 4,000 parts per month. It provides composite secondary structures and interior parts for the B737, B747, B767, B777 and the B787 Dreamliner aircraft.

Boeing plans to double the number of employees at the factory in the next three to four years.

The factory started operations in 2002. Boeing increased its stake in the joint venture to 88 percent in 2008 by acquiring the 40 percent share held by advanced composite maker Hexcel Corp. China Aviation Industry Corp, the country’s leading aviation manufacturer, holds the remaining shares.

“Composite airplanes are the future. We are also working in cooperation with the Chinese Academy of Sciences to widen our research in this field,” Wang said.

Boeing’s announcement comes at a time when the global aviation market is recovering from the worst industry slump since the SARS outbreak in 2003.

Boeing and its European arch rival Airbus won 237 orders worth $28 billion at the July Farnborough Air Show near London, more than three times the amount recorded in Paris a year ago. The two companies heralded the orders as an indication that the industry slump is over. — Read more at ChinaDaily.com…

By Bao Chang (China Daily) – BEIJING – The world’s largest consumer goods company Procter & Gamble Co (P&G) said that it plans to invest at least $1 billion in China over the next five years, in an effort to strengthen both its manufacturing and research and development capabilities.

Bob McDonald, chairman of the board and chief executive officer of P&G told China Daily on Wednesday that “China is P&G’s second-largest consumer market in the world following the United States, but per capita consumption is still far less than that of the US.”

For that reason, P&G is compelled to “continue to increase investment in the market”, he said.

According to McDonald, P&G generated $5 billion in sales in China for fiscal year 2009, accounting for 7 percent of its global sales revenues of $75 billion.

As part of the investment plan, P&G will set up an innovation center in Beijing with an investment of $80 million and over 500 employees from 16 countries.

The innovation center aims to develop new products that are tailored especially for emerging markets including China.

“One of the reasons we (decided) to establish the innovation center here is we can take advantage of China’s universities, research and development technologies and scientists,” said McDonald.

The innovation center will mainly be involved in the development of products including fabric care, oral hygiene, baby care and snack foods.

In addition to the innovation center, a distribution center will be built next month in Guangzhou where the firm’s Chinese headquarters is located, serving distribution for both home and abroad.

McDonald also said that P&G has decided to build the tenth new factory in the Yangtze River Delta region.

During the past two decades, P&G has invested more than $1.5 billion in China.

The company’s aggressive investments are driven by its ambitious goal of adding one billion more new consumers worldwide by 2015, from the current four billion. – read more at ChinaDaily.com…

By Wang Ying (China Daily) – SHANGHAI – London-based luxury department store Harrods is holding talks with the Shanghai municipal government on the opening of its first store outside the United Kingdom in the historic Bund area.

The British emporium is keen on opening a department store in one of the imposing buildings where British banks and merchant houses once traded, a real estate agent familiar with Harrods’ plan said.

But the choices for the British retailer are limited to only a few locations that are large enough for Harrods, which operates one of London’s largest department stores.

Its proposed venture in China was initiated by Managing Director Michael Ward.

“China is the most probable, but we would have to do a lot of work first,” Ward was quoted as saying by The Guardian.

Hannah Hodges, Harrods’ corporate affairs manager said: “However, no plans have been confirmed to open a store in Shanghai.”

Harrods is already a well-know purveyor of luxury goods among well-to-do Chinese consumers who make frequent overseas shopping trips every year.

The Guardian reported that the number of Chinese travelers who shopped at Harrods in the first six months of this year rose 125 percent year-on-year.

Eugene Tang, head of retail at Jones Lang LaSalle in China, said he was aware of talks about Harrods’ Shanghai outlet, but he estimated that it would take a long time before any lease agreement can be concluded.

“We don’t expect to see the opening of Harrods in Shanghai in the next couple of years,” said Tang. “It will take much longer for them to get things right before the opening,” he added.

Negotiations between Harrods and potential Chinese partners will take one year, and another year-and-a-half will be spent on design, decoration and stocking,” said Tang.

Harrods’ move to China is seen as a break with tradition for such a high-end retailer.

“Renowned for their conservative business philosophy, most premier British retail brands don’t go overseas for expansion,” said Regina Yang, an analyst with Knight Frank, a leading property consultancy.

But other British retailers have already made a dash for the yuan.

Marks & Spencer opened its second store in Shanghai’s Yuyuan Garden last month, and it is already scouting for premises for its third branch, according to Yang.

Although luxury goods are relatively cheaper in Hong Kong, Europe and the United States, many mainland consumers who are not outfitting their entire wardrobes with designer clothing prefer the convenience of making occasional purchases at local stores, Yang said.

High-end brands such as Louis Vuitton, Zegna, Gucci, Dior, Tiffany, Hermes and Prada all opened stores in Shanghai between April and June to meet luxury buyers’ ballooning demand. – read more at ChinaDaily.com…

July 5, 2010 | By ChinaRetailNews.com Editor – The international fast food giant McDonald’s has set up a strategic partnership with Shenzhen Metro Company for its expansion in business areas along subway lines.

This is reportedly the first time for McDonald’s to form an alliance with a local metro transit company in China.

According to the agreement signed by the two parties, during the next five years, the American fast food company has the priority to open restaurants in all underground and above-ground real estate projects operated by Shenzhen Metro. Apart from the rent gained from the agreement, Shenzhen Metro can also take the opportunity to develop the fast food business in its subway stations since there is no fast food restaurant in these stations.

Prior to this, McDonald’s announced that it plans to increase its investment in China by 25% and its operating revenue is expected to be triple by 2015, comparing with that in 2009. – read more at ChinaRetailNews.com…

By Hu Yuanyuan (China Daily) – BEIJING – China’s property market has seen soaring investment from foreign institutional investors, driven by strong expectations of renminbi appreciation this year.

According to international real estate advisor CB Richard Ellis, the value of en bloc property transactions in 15 Chinese cities has hit 49.9 billion yuan ($7.36 billion) in the first-half of this year, among which 19.4 billion yuan came from foreign institutional investors, 10.2 billion yuan from Hong Kong, Taiwan and Macao, and the remaining 20.3 billion yuan from mainland investors.

Total investments in the first six months of this year were almost five-fold of those from the same period of last year.

“Affected by the financial crisis, foreign investors were inactive last year and domestic investors dominated the market. But due to better liquidity and expectations of renminbi appreciation, the situation is just the opposite this year,” said Danny Ma, senior director of CB Richard Ellis Research China.

Industry experts say the renminbi will probably appreciated 3 percent this year.

LaSalle Investment Management, a US-based real estate fund, for instance, has been actively seeking opportunities in China, particularly in second-tier cities. Though the fund raised $2 billion last year, it made no investments at all in 2009. But top management said that they will definitely reach a deal in China this year.

“We are now in talks with several projects in the commercial and industrial sectors,” Eric Au, China director of LaSalle told China Daily on Thursday.

For Matt Brailsford, Deputy Managing Director of Savills Beijing, their foreign clients have shown much stronger interest in investing in China’s properties, mainly in the office and retail sector.

“But there is no big increase of new faces in market, most of them remain those from Hong Kong and the United States,” said Brailsford. – read more at ChinaDaily.com…

By Wang Xiaotian (China Daily) – LEIPZIG, Germany – DHL Express, the express arm of Deutsche Post DHL, will continue to expand in China, but in a careful and cautious way, according to Charlie Dobbie, executive vice-president for network operations.

Dobbie told China Daily that DHL Express will continue to build on its partnership with State-owned logistics company Sinotrans Group and channel more investment into the service sector in China.

DHL entered China by setting up a 50-50 joint venture with Sinotrans in 1986. The DHL-Sinotrans joint venture acquired Shanghai Quanyi Express Co Ltd in 2008 to further develop its domestic network.

“The move into the domestic arena was a logical step given the size and future of the market. We have a strong local partnership, and that model has given us the confidence to succeed in China,” said Dobbie.

DHL Express will focus on the quality of service and work on growing its existing business, before considering more domestic acquisitions. – read more at ChinaDaily.com…

ChinaRetailNews.com – American clothing retailer Gap Inc. has unveiled details of its entry into China with plans to open Gap stores in Beijing and Shanghai in late 2010, and simultaneously bring an online shopping experience to all Chinese consumers.

The first four Gap stores will feature a full range of Gap adult, GapKids and babyGap product, including all styles of the brand’s stylish and fashionable 1969 Premium Jeans. This announcement marks the start of a long-term, multi-channel consumer market entry strategy for Gap Inc. that involves more stores in major regions, including Hong Kong, in the coming year.

In Shanghai, a 1,796 square meter Gap flagship will be located on the premier Nanjing West Road, occupying two floors in the Venture Tech building. It will be followed by another 1,140 square meter flagship located on Mid Huaihai Road, one of Shanghai’s top high streets. In Beijing, a 1,165 square meter flagship store will span two floors in the APM building on Wanfujing Street; another 1,800 square meter store will be opened in Chaobei Joy City, a large scale regional shopping center.

As part of its multi-channel entry strategy, Gap Inc. has partnered with Shanghai Yi Shang Network Information Company. The online shopping site will give consumers throughout the country the opportunity to shop for Gap products whenever and wherever they want. – read more at ChinaRetailNews.com

(Xinhua) – HONG KONG – Air China, China’s leading carrier listed in Hong Kong, said late Friday that it would pay $1.398 billion to buy 20 Boeing 737-800 planes.

In a statement filed to the Hong Kong stock exchange, the carrier said the cost would be “payable by cash in installments” and it would “take delivery of the Boeing Aircraft in stages from 2013 to 2015.”

“The aircraft price is subject to price escalation by applying a formula. Boeing Company has granted to the Company (Air China) significant price concessions with regard to the Boeing Aircraft,” said the statement.

The transaction will be funded through cash generated from Air China’s business operations, commercial bank loans and other financing instruments of Air China, said the statement.

The Beijing-based airlines said the transaction would expand its fleet capacity with an increase of around 5 percent based on available tonne kilometers of Air China by the end of 2009.

In particular, the deal would reinforce Air China’s market share in the Chinese domestic market, and would also increase frequency of flights for a number of domestic and neighboring international routes, it added. – read more at ChinaDaily.com…

(Xinhua) – SHENYANG: Representatives of US fast-food chain KFC in northeast China’s Shenyang city Thursday signed the company’s first collective labor contract on the Chinese mainland, agreeing to raise workers’ wages and meeting the demands of a local trade union.

According to the agreement, the company’s roughly 2,000 employees will enjoy a minimum monthly wage of 900 yuan ($131.7) – up from the company’s previous offer of 700 yuan per month – and an annual five percent pay raise.

An executive with Yum! Brands Inc in Shenyang said on the condition of anonymity the agreement is the company’s first collective labor contract on the Chinese mainland.

He admitted the company had been under pressure after media reports of the negotiations with the local trade union.

Yum! Brands Inc in Shenyang manages 57 KFC outlets and 11 Pizza Hut restaurants. The company is known by locals as KFC Shenyang.

The company said in a statement earlier this month most of its employees in Shenyang already have monthly wages of over 900 yuan, and so the signing of the contract “would not necessarily mean workers’ pay would immediately rise.” – read more at ChinaDaily.com…