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DCH Foodmart to cross border

DAH Chong Hong (DCH) is to open its first foodmart or mini-supermarket in Shenzhen at the end of this month marking its entry into the mainland retail market.

Mr Chu Hon-fai, DCH director, said the foodmart will be the first of many similar joint ventures in China.

''When people talk about supermarkets in Hongkong they naturally think about the big two,'' Mr Chu said.

''They don't realise there are others. Part of the problem has been of our own making because, up until now, we have tended to keep a low profile.'' Indeed, one has to look carefully to find a DCH Foodmart but they are there - 50 in fact specialising in quality foods. This year the company plans to open another 10 stores in the territory coupled with an aggressive expansion campaign in China.

Formed in 1946, DCH, which was taken over by CITIC Pacific last year, is one of Hongkong's oldest and largest trading companies.

The foodmarts now account for some 25 per cent of DCH's provisions department's total turnover.

DCH's provisions department is one of the biggest frozen meat and seafood importers in Hongkong suppling some of the leading hotels, Chinese restaurants, major department stores and supermarkets in the territory.

The company moved into the supermarket business seven years ago but has only recently become an active player.

''All we had seven years ago was a show room in Central,'' Mr Chu said.

''There, executive chefs from the hotels could come and examine our produce before placing their orders whether it be for mussels from New Zealand, Australian abalone, Norwegian salmon or Kagoshima beef from Japan.

''Our DCH Foodmarts really came about because our friends and customers believed we had something unique to offer.

''Obviously they were right. Today we have 50 foodmarts in Hongkong where this time last year we had 40.'' Mr Chu insisted that he was not out to compete with the major players.

''Our foodmarts are small, about 2,000 square feet, and we do not have a large range. But the selection and quality of the produce we sell cannot be matched in Hongkong because we are the sole agents,'' he said.

Mr Chu said DCH's expansion had been customer-driven and that was why at all 50 supermarkets there is a telephone which he calls ''the hot line'' and goes directly to his desk in Central.

''And the biggest complaint, in fact the only complaint, I have received is that there are not enough DCH foodmarts.'' Last year the company's new chief executive officer, Mr Richard Liu, told staff that he wanted to push for greater consumer awareness and create a bigger market share for DCH Foodmarts.

''Since then we have made a conscious decision to lift our image in Hongkong,'' Mr Chu said.

''By the middle of the year all our foodmarts will have been upgraded. Many of our customers are overseas Chinese who have returned to Hongkong.

''They have grown used to a certain type of service and shopping environment and that is what we are trying to do with our foodmarts - give the customer a better shopping environment.'' Although, traditionally only selling products for which it is the sole agent in Hongkong, DCH foodmarts are now starting to sell products found in other supermarkets such as Watson's bottled water.

One of the advantages DCH has over its competitors is that it owns some of its premises. It also does not have to deal through middlemen such as buyers and distributors.