CRC to open its first store in China

With shopping malls mushrooming across China, Central Retail Corp (CRC), Thailand's leading retail conglomerate, still sees plenty of room for expansion into one of the world's larger consumer markets.

CRC will open its first department store in China in the first half of next year, most likely in the second quarter, in Hangzhou, Zhejiang province.

The department store will be located at MixC, a giant shopping, office and residential complex in Qianjiang New City, which is to become a new business district in the tourist city.

"The main reason we chose Hangzhou as our first presence in China is that we see opportunity there," said CRC CEO Tos Chirathivat.

"Hangzhou is an up-and-coming city. It has a population of almost 7 million, and most are high-income people," he said.

Chirathivat said Hangzhou is attractive both on the supply and demand side.

"On the demand side, Hangzhou is very attractive because of the customer base. On the supply side, there are only a few department stores with the quality found at the international level. So we feel that we can bring something special to the market and offer it to Hangzhou citizens," he said .

CRC will open its second department store in China in Shenyang in northeastern China's Liaoning province in 2011.

In Hangzhou and Shenyang, CRC is working with Hong Kong-based China Resources, operator of the MixC shopping complexes, which have been successful in Shenzhen, Guangdong province.

"We believe that our department store, with the complementary shopping environment of the MixC shopping mall, will make our move to China a big success," Chirathivat said.

The CEO of the largest non-food retailer in Southeast Asia believes that his department store will be different from many already in the marketplace.

"It will target middle-income to high-income customer segments with a complete range of merchandise, very good visual merchandising, a superb shopping environment and premium services," he said.

The Hangzhou store, with an investment of 600 million yuan, will spread over four floors and cover an area of 22,746 sq m.

The Shenyang store, with an investment of 700 million yuan, will cover an area of 27,526 sq m over seven floors. Both will be known by their Chinese name "Shang Tai - Central".

Just weeks ago, CRC inked another deal to open a third store in China in the Joy City shopping mall in Tianjin.

"Our plan is to open three to four stores by the year 2012 and then open three to four stores each year afterwards," Chirathivat said

The target, he said, is to reach 40 stores in 10 years, including locations in major cities such as Shanghai, Beijing and Guangzhou.

"China has the potential to become the biggest market in the world. It is also emerging as the most important market in the world," Chirathivat said.

"We are looking to China because successfully operating there is a good indicator of a corporation's ability to compete and can provide great rewards. This is why it will be our next major step as we expand our business," he said.

Chirathivat said there also is a personal reason for the move to China.

"Our family roots are Chinese. My grandfather and my father were both born in China and came from Hainan. It is about going back to where we came from and investing there. That's also a key reason why China is a priority for us," he said.

CRC, a 60-year-old family-run business with nearly 400 stores in Thailand, is one of five core business groups operating under the Central Group of Companies. It reported sales revenues of $2.3 billion in 2007.

(China Daily 10/19/2009 page4)