Wanchai Sri-Preaning, who sells eyeglasses at his family's shop in Chanthaburi, Thailand, spends his free time taping posters to buildings on the main road into town. The message: A planned Tesco Plc shopping center nearby will destroy local retailers.
"Shopowners like us will lose more than half of our sales to these stores," said Wanchai, who printed the posters with other local merchants. "Grocery stores and other small shops will be dead as soon as foreign superstores open."
Asian governments are listening to small shopkeepers' protests. Thailand is drafting laws that would limit opening hours and store locations. Malaysia halted approvals of large-scale "hypermarkets" in April as it tightened regulations, and red tape in China has slowed expansion plans by Carrefour SA and Wal-Mart Stores Inc.
Global retailers face mounting local opposition and legal hurdles as they try to tap into the consumer-spending growth that's fueling Asian economies from South Korea to Malaysia. The setback comes at a time when they're relying on Asian sales to counter sagging demand at home and in Latin America.
"They're looking to expand in Asia as markets such as the UK aren't growing," said Iain McDonald, an analyst at Numis Securities Ltd in Liverpool, England, who tracks Tesco and other retailers. "In the long term, if their growth is halted in Asia, that would definitely hurt earnings."
Tesco's total Asian sales jumped 54 percent in the six months to Aug. 10, dwarfing the 6.8 percent increase in the UK, where it's the No. 1 supermarket chain. Asia was the fastest-growing market last year for France's Carrefour, the world's No. 2 retailer after Wal-Mart, measured in local currency at stores open at least a year.
The companies are drawing Asian shoppers to stores that sell everything from fresh produce to furniture under one roof -- often at lower prices than smaller local stores can offer.
Tesco opened its biggest Asian store -- 34,224m2, with 420 employees and 1,600 car-parking spaces -- in suburban Bangkok in September, and has 40 Thai stores. It plans to expand to rural towns in January to reach more of the 40 million Thais living outside major urban areas.
"They haven't introduced anything in Thailand which is going to have a huge effect on our plans," said Peter Bracher, Tesco's head of international corporate affairs.
Michael Raycraft, head of Tesco's Thai business, said: "We hope the needs of the consumer are given a high priority in any proposals for new laws."
Tesco's rapid expansion is prompting a local backlash. A bomb blast and a grenade attack damaged two of its Bangkok stores last July, and the retailer was charged by the Commerce Ministry last month with selling goods below cost -- along with Carrefour, Siam Makro Plc and Big C Supercenter Plc, controlled by France's Casino Guichard-Perrachon SA.
They now face broader government opposition.
"We have let stronger and richer foreigners expand superstores in the country for so long without proper controls," Thai Commerce Minister Adisai Bodharamik said in September. ``We want to create a more level playing field in the retail industry before thousands more small retailers go out of business.''
In Malaysia, hypermarket operators must now submit new-store applications two years in advance, and they can't build within 3.5km of housing areas or city centers. The government raised the minimum capital required for large retailers to 50 million ringgit (US$13 million) from 10 million ringgit.
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