THE investment frenzy in Shanghai retailing, highlighted by the opening of the city's most upmarket store yesterday - Wings Hong Xiang - is expected to intensify, causing a possible oversupply of stores in a few years' time. ''There is a long list of department stores and commercial complexes to be set up in Shanghai after us,'' said Stanley Chu, managing director of the holding company of Wings Hong Xiang department store. Already operating are Sincere of Hong Kong, Isetan of Japan, Taiwan's Mosata and the Shanghai Orient shopping arcade, a joint venture between Shanghai Enterprise in Hong Kong and a local partner. Others are coming. Dickson Concepts is to link up with one of Shanghai's biggest state-owned firms, Jin Jiang, to form the J.J. Dickson Shopping Arcade. Shui Hing has shown similar interest. Both projects are expected to be completed by the end of this year. Further down the road, Topform, Asia Commercial, Lai Sun, Ryoden Wharf, Hang Lung and Kerry Group are all queuing to build large commercial complexes. Most will be built in the two busiest streets in Shanghai - Nanjing Road and Weihai Road. Some are planning to operate stores while others are more interested in developing the property only. After construction, the owners will either sell or let shops. ''The second group mainly comprises property developers which do not have the expertise to run a department store. They consider it as a property investment,'' Mr Chu said. But the locals consumption power may not be able to keep pace with the growth in shops, Mr Chu said. ''That means retailers will have to stay in the red longer,'' he said. Since most retailers were just testing the market, they should try to find ways of minimising their set-up and running costs, such as renting space in a hotel or a well-run department store, he said. Since Deng Xiaoping visited the south last year, the highly protected retail market had been allowed to open a little. Three companies have been permitted by the State Council to import to Shanghai, including Japanese group Yaohan, which is to build the biggest shopping mall in Pudong.