China's "One Belt, One Road" development strategy is expected to bring for Metro AG an opportunity to expand to mainland cities they cannot reach currently, as the initiative will tremendously improve logistics services in the country.

That is according to the German-based global retailer's managing director on the mainland, Jeroen de Groot, who spoke at the China Daily co-branded session at the Omni Channel Retailing Conference in Hong Kong.

De Groot, managing director of Metro Jinjiang Cash & Carry in China, said the initiative will connect a group of countries with 4 billion people in all and facilitate the free flow of goods, capital, people and knowledge.

He believes that it will stimulate the development of not only the eastern region of the mainland, but other areas as well. Retailers will see greater development in these areas as the improved logistics will help them reduce costs. The mainland is a core market for Metro and embodies huge potential, and the company is looking for still more opportunities to open more stores, de Groot said.

The company now runs 82 stores in 56 mainland cities, with new stores coming up in Changsha, Hunan province, and Chongqing.

As growth slows down in the mainland retail market, Metro has been adopting various measures to maintain an upward curve. "Hypermarket and traditional trade are slowing down. But convenience stores and e-commerce are growing at a faster pace," noted de Groot.

Metro China's multichannel strategy regards e-commerce and franchises as its pillars, alongside its traditional cash-and-carry and welfare business.

Metro has opened a convenience store in Shanghai and aims to open more franchises countrywide. It has also launched a new e-commerce website, metromall.com.cn.

De Groot said the company's focus on e-commerce should have come earlier as the online- offline combination is the current trend in the retail industry.

"But our advantage is that we have a strong brand that gained customer trust through physical stores. Pure online stores often face trust problems because customers don't see the real products and have no idea about their quality. That's why a lot of online players are setting up offline stores," he said.

De Groot noted that Metro is not a pure retailer, but a cash-and-carry wholesaler serving mainly professional independent business customers. "We don't see any direct competitor on the mainland, only overlapping companies. That gives us different potentials compared with (supermarket operators) Carrefour and Walmart."

felix@chinadailyhk.com

Jeroen de Groot, managing director of Metro Jinjiang Cash & Carry in China on the mainland, is excited about the prospect of 4 billion people being connected and the free flow of goods across nations. Parker Zheng / China Daily

(HK Edition 06/12/2015 page10)