By contrast, Suning has nearly 400 stores. Number-four player Jiangsu Five Star Appliances, which U.S. chain Best Buy Inc. said in May it would buy, has about 200 branches.

"(Paradise chairman) Chen Xiao and myself both agreed that the electronic retail industry needs further consolidation," Huang was quoted as saying.

Suning, based in the eastern city of Nanjing, has decided to move its headquarters to Shanghai, China's biggest city and the home base of Paradise, to compete more aggressively, the newspaper reported.

Last week Suning secured an 800 million yuan ($100 million) bank loan to fund its expansion.

It reported earnings for the first half of 2006 on Tuesday, saying net profit jumped 110 percent from a year earlier to 258 million yuan ($32.3 million) on sales of 11.2 billion yuan, up 58 percent.