Hong Kong-based retailers are poised to make multi-million-dollar investments to strengthen their presence in China and tap into the new business opportunities presented by the mainland's accession to the World Trade Organisation, the South China Morning Post reports this week.
Mainboard-listed and Japanese-controlled Jusco Stores Hong Kong plans to invest about HK$400 million to open 10 general-merchandise stores in southern China and Hong Kong in the next five years, the company said yesterday.
The comments coincided with announcements from Dairy Farm, which operates 7-Eleven convenience stores in southern China, that it plans to open at least 70 outlets next year, creating nearly 600 job opportunities in China.
Jusco's south China business development director, Soul Lam, yesterday said he expected the company would open seven stores in southern China and another three in Hong Kong in the next five years.
The expansion in China is due partly to lower rental and labour costs - which are about half those of Hong Kong.
He said a 150,000 square-foot store, including a food court, would cost about HK$40 million to build in China whereas renovation costs alone for its store in Lok Fu would amount to HK$63 million.
David Tso Kun, chief executive of 7-Eleven Hong Kong and southern China, a unit of Dairy Farm Management Services, described the chain's expansion across the border as "a race against foreign and local retailers".
"An increasing number of overseas retailers definitely will enter China after its admission into the WTO," Mr Tso said, adding that the first to gain a foothold in China would secure a better position in the market.
He said the group would open between 70 to 80 stores next year, with each outlet needing about nine employees. At present, there are 68 7-Eleven outlets operating in southern China.