B&Q to expand presence to 9 cities
(Business Weekly)
Updated: 2004-12-12 09:49

B&Q, one of Europe's leading home improvement retailers, is planning to expand its presence to nine more Chinese mainland cities next year.

Ian Strickland, managing director of B&Q China, last week announced the retailer will open 18 chain stores in major Chinese cities.

The stores will be located in Chengdu, in Southwest China's Sichuan Province; Chongqing Municipality; Dongguan and Zhuhai, in South China's Guangdong Province; Harbin, in Northeast China's Helongjiang Province; Shenyang and Dalian, in Northeast China's Liaoning Province; Xiamen, in East China's Fujian Province; and Xi'an, in Northwest China's Shaanxi Province.

Strickland made the announcement during the INSEAD alumni event in Shanghai.

He said construction has begun at each of the stores. However, he declined to say how much the expansion will cost.

B&Q, a division of UK-based Kingfisher Group, has established 700 stores in more than 10 countries and regions.

Last year, B&Q posted US$5,655 million in global sales, which was up 33 per cent year-on-year.

B&Q operates 20 stores on the Chinese mainland. The Beijing store is the firm's largest outlet in the world.

In this fiscal year's second quarter, B&Q China posted US$97.8 million in retail sales and US$2.8 million in profits, up 76.2 per cent and 400 per cent, respectively, over the same period last year.

B&Q, which built its reputation on home decorations and retailing, in expanding into other business areas, such as second-hand home decorations and DIY (do-it-yourself), Strickland said.

China Estate Association figures indicate the nation's home furnishing sector has a market scale of US$50 billion a year, and is growing about 20 per cent annually.

To differentiate itself from Chinese companies, some of which are becoming increasingly competitive, B&Q is attempting to excel in quality and customer service.

"We have discovered the main concern for Chinese customers is not price (as commonly believed), but trust," said Strickland.

He dismissed speculation that B&Q's business expansion was prompted by China's lifting of restrictions on foreign investment in the sector, effective on Saturday, in accordance with the nation's World Trade Organization commitments.

"Government policies play a role, but not that big a role," said Li Guangyu, associate principal at McKinsey & Company.

"Foreign retailers are expanding in China because the market is maturing."

Close