Mid-sized mainland retailer relies on small-city strategy for growth

Kenneth Fang Hung knew his new business plan was right on target when Times, a mainland hypermarket operator of which he is the chairman, attracted a long queue in the mid-sized city of Nantong for the opening of its first outlet about 10 years ago.

'Consumers had to wait at least several hours before they could get into the hypermarket, which surprised me because I had never realised they were so eager to experience such a novelty,' Mr Fang said.

The Nantong store was the company's first foray into the mainland's mass retail market by Mr Fang, who has deep roots in Hong Kong's garment and textile industry through his Fang Brothers Knitting.

Now Times runs 58 outlets including 41 hypermarkets and 17 supermarkets in Jiangsu and nearby provinces, and its shares have been trading in Hong Kong since its initial public offering in July last year.

The mainland's growing affluence has encouraged local and foreign retailers to expand into major cities such as Beijing and Shanghai, where household incomes are higher than in other parts of the country.

Mr Fang kept expansion to third- and fourth-tier cities such as Yancheng and Huaian in Jiangsu and Fei Cheng in Shandong to avoid direct competition with global retailers such as Wal-Mart and Carrefour.

'In small cities, hypermarkets have become entertainment and leisure centres for local residents - a unique and interesting phenomenon in China,' he said.