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Taiwan convenience shop chain hits Shanghai

THE Taiwan-based President Chain Store Corporation said it plans to open four to six 7-Eleven stores in Shanghai at the end of March or at the beginning of April this year.

This will be the first time the world's largest convenience store franchise chain will enter the Shanghai market, intensifying already furious competition with the current lead players Kedi, Alldays and Lawson.

President Chain Store said Shanghai would be its focus in East China region and the 7-Eleven stores will be located in business areas as they target high-end consumers.

The company aims to open 100 7-Eleven convenience stores in Shanghai within three years.

President Chain, a subsidiary of the Taiwan Uni-president, owns the operating rights to several food and beverage brands, including Starbucks and Mister Donut, in Taiwan and the Chinese mainland. It operates nearly 4,800 7-Eleven convenience stores in Taiwan.

The company won the franchise right from 7-Eleven China to operate the brand in Shanghai in May last year.

Before that, 7-Eleven teamed up with other partners to run stores in Beijing, Guangzhou and Shenzhen, but the expansion was slower than expected because of restrictions on franchising.

Analysts also warned that 7-Eleven will have little room in the mature market in Shanghai, dominated by rivals such as Bright Dairy's Kedi, Hualian's Lawson and LGS Group's Allday.

"Shanghai now boasts nearly 4,000 convenience stores after several years of rapid development and it will be hard to expand the network in a short period," said Pei Liang, secretary general of China Chain Store & Franchise Association.

"Without the economic scale, 7-Eleven's advantage on pricing and sourcing will also be limited," Pei added.

Overseas retailers have been keen to enter China, one of the world's most populous countries, as economic development boosts consumer spending. China's retail sales rose 21.6 percent to 10.85 trillion yuan despite the demand weakened by global financial crisis.


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