Retailer and property developer Pacific Concord Holdings says it is on the verge of forging a joint venture with associate company Yaohan International Holdings to set up hypermarkets in China. Chairman Wong Sai-chung yesterday said co-operation was a priority following the company's purchase of a 19.86 per cent stake in Yaohan for HK$134 million from its major shareholder Kazuo Wada and his family. Mr Wong said the joint venture would involve the establishment of 'a few' large-scale supermarkets in Beijing and Shanghai, with details to be announced 'very soon'. 'We will establish middle-ranked hypermarkets which will mainly sell food and daily necessities,' he said. The terms of the purchase permitted Pacific Concord to use Yaohan's corporate logo in its Chinese stores. This would not intensify competition between the two parties, Mr Wong said. 'The goods we are selling are different from Yaohan's. Our seven chain stores largely sell food and daily necessities while Yaohan has a variety of products such as fashion and cosmetics,' he said. Having experienced four years of losses in China, Mr Wong said the company was now on the right track in the mainland. 'Since the end of last year, we started to redefine our position from high-to middle-end,' he said. Foreign retailers, including Pacific Concord, had falsely assumed the mainland was ready for upmarket goods, he said. Only 0.1 per cent of the population earns 15,000 yuan (about HK$13,993) a month and can afford upmarket goods, he said. 'What the majority [of mainland consumers] want is simple decoration, middle ranked goods and prices,' Mr Wong said.