Wahaha boss urges tax cuts to lift growth
Zong Qinghou also wants Beijing to break up monopolies and ease red-tape burden
Beverage tycoon Zong Qinghou, the mainland's richest man, is now planning to build a retail empire.
The chairman of Hangzhou Wahaha Group yesterday said the company plans to open at least 100 shopping centres across the mainland over the next three to five years.
An initial public offering of the retailing business is also being weighed but there's no time frame as yet, he said.
"We are very confident about tapping into the retail industry. We believe the revenue generated from the retailing sector will exceed that of our bottled-water business by 2015," said the 67-year-old billionaire who Forbes ranked as the richest mainlander, with a wealth of US$10 billion, last year.
Wahaha, the mainland's largest soft-drink maker in terms of revenue, last year posted sales revenue of 63.6 billion yuan (HK$80 billion) and a net profit of 8.1 billion yuan.
The company has budgeted 1.7 billion yuan to construct, rent or jointly operate shopping centres with partners.
Besides retail, it's also trying to expand into machinery manufacturing and environmental industries.
"We chose retailing as the first industry to break into because this is a relatively easier one compared to others," said Zong.
Despite his confidence, the company's first retailing foray in its home base of Hangzhou city has not been encouraging.
A shopping centre, called Waow Plaza that the company launched, is still suffering low customer traffic and poor business performance since it opened in November.
Zong said the project was only a test case for Wahaha to accumulate operational experience, adding it would do a lot better after the subway station under it comes on stream.
Wahaha has so far introduced more than 100 fashion, jewellery, furniture and food brands from Europe into China, with most of its goods priced between 500 yuan and 3,000 yuan. Young families and white-collar office workers will be the target group.
Zong said the company will this year build two more shopping centres of its own and work with another 19 mall operators in cities such as Taiyuan, Tianjin, Guiyang and Nanchang. He expects retail sales to run into "some hundreds of millions of yuan" this year.
The company also plans to have talks with Taiwan's Far Eastern Department Stores and Singapore's Raffles to explore business opportunities.