Convenience Retail Asia, whose stores compete with 7-Eleven outlets in Hong Kong, is for the first time to franchise some mainland outlets under its Circle K brand once its loss-making operation turns around and possibly as soon as next year.
Executive director and chief executive Richard Yeung Lap-bun said CR Asia, which directly operates 250 Hong Kong stores, was expected to profit from its mainland operation next year as it added more outlets to the 58 shops already there.
CR Asia plans to have at least 100 outlets in southern China next year in addition to 300 in Hong Kong. Mr Yeung did not indicate how many of the new mainland stores would be franchised.
'We are still on the learning curve for franchising and in China we have to be careful with the business because any problem associated with that will affect Circle K's image,' he said.
Mr Yeung said CR Asia, a unit of Li & Fung Retailing, had already invested in computer systems and logistics infrastructure to support its retailing in Guangzhou.
The company had started to integrate its 60 per cent-held Dongguan store chain, Sun High, which owns 200 franchised stores, he said.
The company would maintain the Sun High brand because these stores targeted local and migrant workers while the Circle K brand focused on middle-class and white-collar customers.