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…

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

The JW Marriott hotel, Beijing

By Jing Jin (China Daily) – SHANGHAI – Marriott International Inc, the largest US hotel chain, plans to double its hotels in China in the next five years, taking advantage of an expected jump in domestic tourism as the world’s third-largest economy expands.

China is expected to be the world’s single largest source of international tourism and will become the biggest travel destination over the next 10 years, JW Marriott Jr, chairman and chief executive officer of Marriott, said in a statement released at a media briefing in Shanghai.

“It’s growing very quickly,” Arne Sorenson, Marriott president and chief operating officer, said at the briefing at the World Expo in Shanghai. “By the end of this year, revenue in same store hotels is expected to grow over 20 percent in China.”

Marriott, based in Bethesda, Maryland, expects to have up to 90 hotels in China by 2015, up from 46, the company said.

China is Marriott’s largest market outside North America, with sales from the nation of 1.4 billion people accounting for less than 10 percent of revenue.

China’s economy grew 11.9 percent in the first quarter from a year earlier, the fastest pace in almost three years.

More than 4 million visitors, an average of 200,000 a day, have entered Shanghai’s $44 billion World Expo park since its May 1 opening.

Hotel and tourism stocks are likely to extend gains this year as a jump in visitors during the World Expo may increase earnings by 20 percent, Guotai Junan Securities Co said last month.

Home Inns & Hotels Management Inc, China’s second-biggest budget hotel operator, said in March that the World Expo will boost room rates by as much as 20 percent, and it’s adding 38 percent more hotels nationwide. …read more at ChinaDaily.com…

By Donny Kwok (Shanghai Daily) – MCDONALD’S Corp, the world’s biggest fast-food chain operator, is looking for new franchise partners in China, expanding a six-year-old trial program in its fastest growing market, a spokeswoman said yesterday.

McDonald’s relies heavily on franchises in more mature markets such as the United States, but has almost exclusively opened self-operated stores in China since entering the market two decades ago.

The company launched a pilot franchise program in China, but has so far limited it to three franchisees running six restaurants.

It moved to expand the process in April, posting information on its China Website inviting new franchise applicants as it accelerates a plan to double its China network to more than 2,000 outlets by 2013.

McDonald’s had asked interested parties to prepare at least 2 million yuan (US$293,000) to cover equipment purchases, joining fee and other expenses, a spokeswoman said. She added that the company would initially experiment with new franchisees in Jiangsu Province near Shanghai. – read more at ShanghaiDaily.com…

Starbucks VIA Ready Brew instant coffee is offered at a Starbucks coffee shop in Chicago, Illinois. Starbucks instant coffee is already available in the United States, Canada, the United Kingdom and Japan. (Scott Olson/For China Daily)

By YU TIANYU (China Daily) – BEIJING: Global coffee chain Starbucks Corp is planning to launch instant coffee products in China, a region it believes will be its largest market outside North America, surpassing Japan.

Wang Jinlong, chairman of Starbucks in China, told China Daily that the company is presently working on market surveys and customer preferences for such products.

Starbucks Chief Executive Officer Howard Schultz said the company expects to sell more than $1 billion of its instant coffee, called Via Coffee Essence, worldwide after it started offering the powdered mix in Japan, the world’s biggest market for instant coffee since early this month.

The product is already available in the United States, Canada and the United Kingdom.

“During the last five decades, there have been very few new products, but great progress has been made in the world’s instant coffee market,” Wang said.

“Starbucks has taken over 20 years to revolutionize its offerings and we are offering high-quality instant coffee that customers can enjoy anytime and anywhere,” he added.

Instant coffee accounts for just 2 to 3 percent of coffee consumption in the US, he said. But, the company is convinced of the huge potential in China and expects to launch the products soon.

According to market research firm Euromonitor International, coffee sales in China could reach $3.6 billion by 2011 from $2.4 billion in 2006.

Instant coffee currently makes up the biggest chunk of China’s coffee industry with Nestle’s Nescaf and Kraft’s Maxwell House the major players in the market.

Starbucks operates more than 16,000 outlets in over 50 countries. Since entering the mainland in 1999, it has 376 outlets in 26 cities, mainly in coastal regions.

Wang said the company would focus more on inland cities in the future.

The company expects second- and third-tier cities to become significant markets after its expansion.

It has opened 14 outlets in Chengdu and 10 outlets in Chongqing.

Meanwhile, the company will look to further expand its presence in first-tier cities like Beijing, Shanghai and Shenzhen. — read more at ChinaDaily.com…

Scheduled to fly in 2016, the COMAC C919 will be China's first large commercial jetliner.

People’s Daily Online, April 23, 2010 – US Aerospace firm Hamilton Sundstrand said it has won a $1 billion long-term contract to provide the electric power generation and distribution systems for China’s first single-aisle C919 aircraft, beating rivals including General Electric Co.

A source close to the deal told China Daily that Hamilton Sundstrand will form a joint-venture partnership with Aviation Industry Corporation of China (AVIC) System Co Ltd to develop and manufacture the electrical system, as stated in a letter of intent signed on April 15 in Xi’an, Shaanxi province.

The C919, China’s first large commercial jetliner developed by the Commercial Aircraft Corporation of China Ltd (COMAC), is expected to take flight in 2016.

Shanghai-based COMAC aims to sell more than 2,000 of the 150-seat single-aisle planes over the next 20 years, challenging Airbus and Boeing in both the domestic and global markets.

Hamilton Sundstrand, a subsidiary of United Technologies Corp, estimated in a statement on its website that the deal would be worth more than $1 billion in revenue over the life of the program.

“Hamilton Sundstrand is honored to partner with COMAC to provide the electric system on the new C919 aircraft,” said Hamilton Sundstrand President Alain Bellemare.

“With this agreement, Hamilton Sundstrand continues to play a large role in the Chinese aviation industry’s rapid growth.”

The contract is expected to contribute to United Technologies Corp’s estimated 2010 earnings of between $54 billion and $55 billion for 2010.

United Technologies Corp, which also makes Pratt & Whitney jet engines and Sikorsky helicopters, said on Wednesday its first quarter profit jumped 20 percent, the first increase in a year as the industrial conglomerate cited its efforts to cut costs and boost productivity.

United Technologies rose $2.73, or 3.7 percent, to $76.93 in New York Stock Exchange trading on Wednesday.

Hamilton Sundstrand is a key supplier on COMAC’s 90-seat ARJ21 regional jet, including the electric power, high-lift actuation and fire protection systems. — read more at People’s Daily Online…

Joining the SkyTeam will help China Eastern Airlines fend off the competition from major rivals and share more resources with other members. (Agencies)

By Wang Ying (China Daily) – SHANGHAI – China Eastern Airlines said on Friday it would sign a memorandum of understanding to join global airline alliance SkyTeam.

“What we have signed is a preliminary agreement. And after a year when China Eastern fulfils all the requirements of SkyTeam, we will become its official member,” Luo Zhuping, company board secretary, told China Daily.

The Shanghai-listed airline had been the only one of China’s top three carriers not to be a member of any global alliance.

Analysts said joining the alliance will help the airlines fend off the competition from major rivals and share more resources with other members.

Liu Shaoyong, chairman of China Eastern, said earlier this week the company was in talks with all three global alliances, including Star Alliance and Oneworld. Sources with knowledge of the matter told China Daily that all three alliances were lobbying the carrier with favorable conditions.

Currently, both Shanghai Airlines and Air China belong to Star Alliance, and the two carriers share a lot of resources in term of customers, flight transition and air ticket booking on the platform. Guangzhou-based China Southern Airlines is member of SkyTeam.

“The airlines’ choice is easy to understand,” said Yao Jun, an aviation analyst at China Merchants Securities. “As former chairman of China Southern Airlines, Liu would like to join forces with China Southern to compete against the nation’s most profitable airlines, flag carrier Air China Ltd,” Yao said.

This also marks a major victory for SkyTeam which has sought to expand its membership in the Asia-Pacific region, one of the world’s fastest growing aviation markets. – read more at ChinaDaily.com…

Visitors look at property models at the Shanghai real estate fair.

April 14, 2010 (People’s Daily Online) – A total of 62 new property projects will start pre-sale in Shanghai in April, up 63 percent month-on-month. Analysts said the significant growth resulted from the developer’s fears over tightening policies that may be introduced if prices remain too high.

“As of this Tuesday, 62 new projects are expected to be released by the end of April, and 15 of them have already started pre-sale,” said Xue Jianxiong, an analyst with Nasdaq-listed China Real Estate Information Corp (CRIC).

The momentum started in late March, when 619,000 square meters of new housing was made available from March 20 to 27, accounting for 88.5 percent of the total in the month.

“Usually, the best season for property sales is May and June, and in each peak season, the new projects released won’t exceed 40,” said Xue.

“The last four days of March saw average sales of more than 1,000 every day, marking the beginning of the new sales season, which will last throughout April and May,” said Ma Ji, a consulting manager with Centaline Property Agency Ltd in Shanghai.

“However, if the price stays at a high rate, the trade volume will not be able to pick up. In such circumstances, further tightening policies from the central government are inevitable,” Ma said.

As the host city of the World Expo, the authorities in Shanghai have required all construction sites to suspend work within an area of 25 sq km of the Expo.

But analysts said the recent explosive growth in the number of projects recently released has little to do with the restriction.

“Only a limited amount of residential projects are included in the 25 sq km area, and most of these are luxury housing. Actually, developers have made good preparations to cope with the new regulation,” said Michael Klibaner, head of research at Jones Lang LaSalle (JLL) Shanghai. – read more at People’s Daily Online…

Air Canada's overall capacity will increase 4 to 6 percent this year, while Asia will see a more-than-10 percent rise in capacity. (Agencies)

By Lu Haoting (China Daily)- BEIJING – Air Canada, the flag carrier of the North American country, said it will resume double daily services to Beijing and Shanghai in June and is planning to fly to Guangzhou in 2013 to cater to increasing travel demand between the two countries.

The Canadian carrier is expected to receive its first Boeing 787 Dreamliner in 2013 and is considering launching scheduled services between Guangzhou and Vancouver with a B787, the most fuel-efficient airliner built by Boeing, said Calin Rovinescu, chief executive officer (CEO) at Air Canada.

The Guangzhou service would make Air Canada the first North American airline to serve the southern city in the Pearl River Delta.

“China is amongst the most important international markets for us. The increased capacity to Beijing and Shanghai is a large commitment of assets, over $1 billion of assets,” Rovinescu said on Friday.

Rovinescu said the continued economic rebound in China made Air Canada “confident about taking a risk” by expanding capacity in China while the airline industry has just started to see signs of recovery from falling travel demand.

Another important driver is that the Chinese government granted Approved Destination Status (ADS) to Canada last December, he said. The ADS system simplifies visa application procedures for tourists and they can use ordinary passports to apply for tourist visas if they want to visit an approved country.

The number of Chinese tourists in Canada is expected to increase 50 percent annually by 2015 after ADS takes effect, according to figures from Conference Board of Canada.

Air Canada reduced its total capacity by 14 percent last year due to falling travel demand. Its overall capacity will increase 4 to 6 percent this year, while Asia will see a more-than-10 percent rise in capacity and China is seeing the biggest increase, about 25 percent, Rovinescu said. – read more at CHinaDaily.com…

Shanghai's Hongqiao Airport

A new airport terminal in Shanghai started operation Tuesday ahead of the opening of the Shanghai World Expo amid the city’s efforts to build a “world-class” traffic hub.

The 360,000 square meter terminal with a new runway has 45 plane parking bays and an annual transport capacity of 40 million people, said Shen Xiaosu, deputy director of Shanghai’s Urban, Rural Development and Traffic Committee.

As of March 16, a total of 11 domestic carriers including Shanghai-based China Eastern Airlines, Air China and China Southern Airlines had moved their operations to the new terminal. The old terminal will be primarily used by some budget airlines and chartered flights to Japan and the Republic of Korea, according to the airport’s website.

Together with the opening of the new terminal on Tuesday, the extension of Shanghai’s subway line 2 linking with the new terminal also started operation, the airport’s website said. – read more at People’s Daily Online…