Chinese consumer electric appliances retail giant Guomei will start negotiations with its foreign counterparts on cooperation in two weeks and the US-based Best Buy Inc are a possible choice.
Guomei's senior executives will leave for the United States for detailed talks about the cooperation deal, according to an executive of the Beijing-based appliances retailer.
He Ju, Guomei's vice-president, pointed out, "With the globalization, cooperation with foreign giants will be a trend."
"If we move earlier, we will gain a favourable position in the coming competition against foreign rivals after China's accession to the World Trade Organization," he added.
It has been rumoured that Goldman Sachs, entrusted by a US electronics retailer, has been contacting Guomei through its legal adviser Dapeng Securities.
Chen Xiaomeng, manager of the corporate planning of the company, revealed that its foreign counterpart would be 10 times larger than Guomei in terms of numbers of stores and revenues.
"I can't tell who it is, but some reporters speculate it is Best Buy," Chen said.
It has also been reported that Circuit City in Richmond, Virginia, is another possible partner.
Although the cooperation scheme is still not clear, Guomei, as one of the best-known retail brands in China, will not give up its control of future cooperation.
"Although foreign giants have more capital and experience in running a big sales network, Guomei's reputation among customers and good relations with local producers will be factors that foreign partners must rely on," he added.
Guomei has 35 stores in four Chinese cities and harvested a sales volume of 3 billion yuan (US$363 million) last year. It has vowed to expand to 80 stores in 11 cities this year and 200 stores before 2002.
(China Daily 06/22/2001)
