President Chain to boost overseas sales

President Chain Store Corp (統一超商), which operates close to 40 subsidiaries, said yesterday that despite encountering some difficulties in China, it intended to boost its overseas sales to 30 percent of its total revenues within the next three years.

The firm's cash cow 7-Eleven convenience store chain raked in sales of NT$100 billion (US$3.03 billion) last year, accounting for more than 50 percent of total revenues, president Hsu Chung-jen (徐重仁) told reporters yesterday.

President Chain operates the world's third-largest 7-Eleven franchise.

Hsu refused to disclose detailed financial figures, including profits or estimated performance for this year.

Expansion abroad

Sales from its operations abroad -- in hypermarkets, supermarkets, coffee shops, and health and cosmetics stores -- accounted for nearly 20 percent last year, he said.

President Chain is looking to expand its turf, particularly in the Chinese market.

As of the end of last year, it ran 100 Starbucks stores in Shanghai in a 50-50 joint venture with the Seattle-based coffee giant.

Facing strong competition from various European and Japanese competitors, the firm plans to add 60 coffee houses in eastern China this year, mainly in subway stations and crowded areas.

In cooperation with a local partner, President Chain also operates 38 supermarkets in Shandong Province.

Most of the stores are located around Jinan, the biggest market, Hsu said.

As the supermarket business began making profits last year following organizational restructuring, Hsu expected to open stores at a faster pace with a target of 100 locations by 2009.

In Shenzhen, President Chain's subsidiary, health and cosmetics retailer Cosmed (康是美), increased its presence to seven stores over a period of three years.

Idiosyncrasies

The slower-than-expected expansion was due to market idiosyncrasies, which forced the company to offer a customized mix of products and finding a balance between pharmaceutical and cosmetic products, he said.

With this difficult phase behind it, the firm is looking to run a total of 16 Cosmed outlets this year, with locations expanding to Guangzhou and Shanghai.

In Sichuan Province, President Chain has two hypermarkets under the brand name Unimart, 100 percent owned by the Taiwanese company.

The Nanchung (南充) store sports a massive retailing space of 13,200m2, integrating a supermarket, clothing shops and electric appliance stores.

The firm plans to add two more hypermarkets in Chengdu this year, backed by its sufficient resources and personnel training, Hu said.

Despite these promising developments, President Chain has so far been unable to make progress in its application with US headquarters to run 7-Eleven in China.

"We remain optimistic and hope to report a breakthrough in the near future," Hu said, adding that overseas markets have become a main battlefield for multinational businesses.

Shares of President Chain advanced 1.65 percent and closed at NT$80 on the local bourse yesterday.