OBI moves Asian hub to Shenzhen
The German retailer takes 60 jobs with it across the border
OBI, one of the world's largest Do-It-Yourself retailers, will relocate its Asia sourcing centre and 60 jobs from Hong Kong to Shenzhen next year, as the special economic zone cements its status as one of the top procurement hubs for global retailing chains.
The German retail giant's new regional sourcing centre would procure products for its more than 7,000 global retail outlets, OBI Asia president and chief executive Li Fengjiang said yesterday at the China (Shenzhen) Consumer Goods Procurement Fair. The trade fair has attracted scores of retailers from Hong Kong and overseas, along with hundreds of mainland companies.
Matthew Zhang, OBI Asia's vice-president for merchandising and logistics, said: 'Shenzhen is indispensable to our marketing strategy. We have to minimise our procurement costs and maximise the benefit for our customers in terms of reduced prices.'
He said relocating OBI's sourcing centre to Shenzhen was desirable given the Pearl River Delta's emergence as 'the world's workshop'. 'Continuing to conduct business from Hong Kong is not ideal. We prefer getting closer to suppliers in China. From Shenzhen, it is much easier for us to expand our sourcing coverage to other cities [in the delta],' Mr Zhang said.
OBI's procurement activities in Shenzhen account for 40 per cent of products sourced by its Hong Kong-based Asia-Pacific unit, which in turn is responsible for 80 per cent of the group's global sourcing operations. OBI sources more than US$150 million worth of products from China annually.
OBI established its regional procurement centre in Hong Kong more than 20 years ago. While it would maintain a small office in Hong Kong, OBI China general manager Xiao Ai said Hong Kong-based employees affected by the move would have the option of relocating to Shenzhen.
Carrefour sources 66 per cent of its products from the mainland, where it has three procurement offices and also invested aggressively in a chain of large retail outlets.
According to Jose Bascon, managing director of Carrefour Global Sourcing Asia, the company's worldwide purchasing activities reached US$1.6 billion last year. He said Carrefour's buying on the mainland would increase by about 40 per cent this year.
Target, the fourth-largest retailer in the United States with about 1,500 stores and annual turnover of US$44 billion last year, is also considering setting up a procurement centre in Shenzhen. Sourcing services director Chris Huber said: 'Target must be part of the migration to Shenzhen. Our goal is to import 50 per cent of our products directly.'
Dai Dinyi, vice-chairman of the China Logistics and Purchasing Federation, forecast that goods sourced by foreign companies from China would jump from US$30 billion last year to $50 billion in 2005.
Shenzhen vice-mayor Wang Suiming said: 'From Shenzhen, you can reach five airports including Hong Kong and Macau within 80 minutes by car.' Underscoring the special economic zone's role in world trade, Ms Wang claimed that one in every 10 clocks and watches was now made in Shenzhen.
