In this remote region along the old Silk Road, Carrefour is on the march.

The Paris-based retailer has already opened two stores in Urumqi, one in the northern end where many ethnic Chinese live and another next to a mosque in the Muslim section populated by Uighurs. This fall, Carrefour will open a third mega-store in the city of 2 million, selling groceries alongside its other goods.

What about Wal-Mart Stores?

"I can't imagine they will come here," Christian Roquigny, who manages Carrefour's Uighur store, said as he walked past a golden-domed mosque.

Roquigny boasted that his store sold no pork and was certified as halal, or permissible under Islamic dietary law. Wal-Mart managers, he said, aren't given the same flexibility to adapt.

As the world's leading retailers battle for new markets around the globe, they are increasingly setting up in places like Urumqi, where Carrefour's average checkout total is just over US$5.

Wal-Mart and Carrefour, the world's No. 1 and No. 2 retailers, have stepped up their expansion in China in recent years, virtually matching each other, store for store, in many locales.

Carrefour's operation in this western city demonstrates why the French company has raced ahead of its multinational rivals in the world's most-populous nation. By joining with Chinese partners, adapting to local culture and employing a supply chain that includes 18-wheel trucks and three-wheel bicycles, Carrefour has become the biggest foreign retailer operating in China.

(For more biz stories, please visit Industry Updates)