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South Korean trading giant Hyundai has unveiled plans to open a department store in Beijing by the end of this year.
Named South Korea Show, around 30 percent of the store's goods will be directly imported from South Korea.
Located in East Beijing's Shilipu commercial area, the department store's combined business area will be nearly 30,000 square meters.
In addition to garments, accessories and a supermarket for food and daily necessities, a gym, an entertainment center, restaurants and a tea house will be built in the department store.
Since foreigners are not allowed to set up solely funded retailing enterprises in China before the end of this year, Hyundai linked up with Beijing Sanlian Real Estate Agent Co Ltd to set up Beijing Hyundai Sanlian Commercial Management Co Ltd in March.
The joint venture is responsible for the preparation and operation of South Korea Show, according to Wang Guoying, sales manager at Sanlian Real Estate Agent Co Ltd.
The department store's furnishings and counters were all designed by South Koreans in a bid to guarantee a shopping environment that is similar with that in South Korea.
"Meanwhile, around 30 percent of the commodities, involving garments, accessories, food and drinks, are made in South Korea, which can be regarded as one of our business advantages," said Wang.
Hyundai Group is one of the three biggest enterprise groups in South Korea.
The Beijing store will be its first retailing outlet in China.
The conglomerate is eying the huge market potentials in China's retailing sector and the business opportunities brought by the 2008 Beijing Olympics.
"To date, South Korean-style goods, especially garments and accessories, are very popular among Chinese youth, as people describe the fashion as a South Korean trend," said Wang.
In addition, there are nearly 200,000 South Koreans working, studying and living in the capital city, who will be another important target group for South Korea Show.
Yan Ligang, a spokesman for the Beijing Commerce Bureau, told China Daily that the entry of Hyundai may add new powerful competitors to Beijing's retailing market.
During recent years, the capital city has become the scene of heated competition between domestic and foreign retailers, including Wal-Mart, the world's top chain retailing operator, France-based Carrefour and Japan's Ito Yokado.
"Hyundai may introduce the South Korean operation style into the local market, which will give consumers more choice," said Yan.
Wang specifically pointed out that Hyundai will introduce a new operating model into South Korea Show.
Around 300 stalls in the department stores will be rented to the contractors, and the joint venture promises to pay 10 percent of the rental to the contractors, no matter how good or bad their performance is, according to Wang.
"Such operation models aim to reduce the contractors' risks, in a bid to lure more investors and accumulate more funds," said Yan.
(China Daily April 29, 2004)
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