Metro Group expands operations in China

As one of the first German companies to enter the Chinese market, retail giant Metro Group said it will continue to invest and expand in China this year.

Olaf Koch, CEO of Metro Group

The Group's self-service wholesale business, Metro Cash & Carry, entered the Chinese market in 1996. Today, Metro Group runs 64 wholesale markets in 46 cities across China, with more than 10,000 employees serving more than 3.8 million customers, including hotels, restaurants, canteens, small retailers as well as offices and institutions.

Unlike retail giants Carrefour and Wal-Mart, the German company is focusing on the Chinese business-to-business wholesale market.

In 2012, a dozen new stores opened in China. As a result, sales of Metro Cash & Carry China in 2012 increased by 23 percent to 1.89 billion euros ($2.44 billion).

"China is indeed one of the eight focus countries within our 29-country international portfolio which clearly exhibits our strong commitment to China as well as high confidence in the prospects of the market," Olaf Koch, chairman of the management board and CEO at Metro Group, said.

According to Koch, China is one of the most important markets for Metro Group. "That's why we took the initiative to enter the market in 1996 as a pioneer among international retailing groups," said Koch. "The steady and rapid economic growth as well as the profound transformation of the distribution and trade sector in China offer Metro exceptional business potential to tap."

Rising living standards have effectively boosted domestic demand while the growing disposable income has increased the capacity for consumption in the country. The company is also placing greater emphasis on lower-tier cities.

In order to cater to the growing market, Metro defined three regions in China in which it wishes to expand: the Yangtze River Delta, the Pearl River Delta and the Bohai Bay Economic Rim. In these three regions, it invests not only in the metropolitan cities such as Beijing, Shanghai and Guangzhou, but also in second- and third-tier cities as the service sector in these cities has been developing rapidly and offers remarkable opportunities.

"For example, last month we opened a store in Yancheng as our first step into northern Jiangsu province," Koch said.

"Hotels, restaurants, catering and hospitality firms are our primary customer group and apparently their distinctive growth provides a great deal of business opportunities for us to further develop," he added.

Talking about its successful experience in the Chinese market, Koch said the Chinese spirit of relationships is based upon mutual interests and a common understanding. "This also gives it an emotional perspective," he said.