In the UK, Tesco is such a formidable force in the retail landscape and competitors and suppliers quake at the mention of its name.
In China, Tesco has yet to achieve similar importance– it has 31% of the UK grocery market — but nevertheless a deal with Tesco is a good way to target China's aspirational middle classes, particularly if you are a small mobile phone retailer like EBT Mobile.
Aim-listed EBT Mobile has just signed a deal with the retail giant to open seven mobile phone stores in the next few weeks within Tesco Hymall hypermarkets (pictured), better known in China by their Chinese name, Le Gou, which translates as “Happy Shopping”.
The agreement with Tesco Hymall is the latest move in EBT Mobile's strategy to expand its presence of outlets though deals with leading Chinese hypermarket chains.
EBT Mobile already has similar agreements in place with Carrefour, Metro, Lotus, RT-Mart, Wu-Mart, Auchan and Trust-Mart (35% owned by Wal-Mart).
Tesco paid $260m for a 50% stake in Hymall in 2004 and it has 47 stores in China but only one, in Beijing, currently operating under the Tesco fascia — see this EngagingChina story. In its latest annual report, Tesco admits that the Hymall business made a small loss in but sales continue to grew 19%.
Elsewhere on the retailing front:
- Another new entrant in China's retail sector, Best Buy of the US, also admits to a modest loss on its Chinese operations. Best Buy bought a majority stake in the 136-store Jiangsu Five Star Appliance last year — see this EngagingChina story — and since then it has it has “immersed itself in learning the Chinese retail system” according to this interview.On the strategy side, Best Buy hopes to strike deals with Chinese electronics manufacturers to create proprietary, private-label goods that Best Buy can sell exclusively in its stores in the west.