Britain's largest retailer takes on global rivals Carrefour and Wal-Mart after buying into a hypermarket chain Tesco, Britain's biggest retailer, has made its first foray into China's booming retail market, buying a 50 per cent stake in a local hypermarket chain for GBP140 million (HK$2.02 billion). Tesco has agreed to buy 50 per cent of Hymall Commercial Retail Group, previously wholly owned by Taiwanese-backed Ting Hsin International Group. The retail giant joins global competitors such as Carrefour and Wal-Mart in having a slice of the retail market in the world's most populous nation. 'China is one of the largest economies in the world with tremendous forecast growth and a market we have researched extensively over the last three years,' Tesco chief executive Sir Terry Leahy said yesterday. 'We believe Ting Hsin is the right partner and Hymall is the right store chain for our strategic move into this exciting market.' Shanghai-headquartered Hymall, which opened its first store in 1998, operates a chain of 25 hypermarkets with an average store size of 89,000 square feet in 10 mainland cities, including Beijing and Tianjin, under the brand name Legou, loosely translated as 'happy shopping'. It reported an after-tax profit of GBP5.5 million on sales of GBP330 million last year, with forecast 36 per cent year-on-year turnover growth to GBP450 million this year. Although it did not make the cut for the Ministry of Commerce's (Mofcom) top 30 chain-store list last year, Hymall's 10 stores in Shanghai ranked it among supermarket chains with the largest presence in China's emerging financial and commercial centre, a source close to the company said. Hymall plans to open up to 10 more stores in the next 12 months. The pace of expansion would be sustained over the next few years, with geographical reach spreading from Shanghai and northern China to the south and southwestern parts of the country after next year, the source said. With a huge retail potential but a fragmented market and a short history of chain stores, China has become a magnet for foreign giants. Urban retail sales rose 10 per cent year on year to top 2.9 trillion yuan in China last year, with the 30 largest retail chains recording 29.9 per cent growth in turnover to 270.4 billion yuan, according to official figures. The most successful foreign player in China, French chain Carrefour, opened 41 stores between its entry in 1995 and the end of last year. A 25.7 per cent sales growth to 13.4 billion yuan last year placed it fifth on Mofcom's list of top 30 retail chains. United States giant Wal-Mart, with 33 stores in the country and turnover of 5.85 billion yuan at the end of last year, is said to be less of a success profitability-wise. Opting to buy into an existing business rather than following Carrefour's greenfield approach, Tesco was hoping to benefit from Ting Hsin's 14 years of mainland experience, a Tesco spokesman said. Best known for its 'Master Kang' brand of instant noodles, Ting Hsin was founded by the Wei brothers of Taiwan. They have pumped at least US$1.2 billion into dozens of companies in the mainland since 1989, operating factories, fast-food restaurants and hypermarkets within their portfolio. That lineage helps Hymall overcome local protectionism, which has frustrated even domestic retail chains in cross-regional expansion. 'What Ting Hsin has always been very focused on is building good relationships with local and provincial governments,' the source close to the company said. The deal is expected to be completed within four months.