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Last Updated: Friday, 26 January 2007, 09:26 GMT
Tesco opens own-brand China store
Tesco shopping basket
The goods in the Chinese shopping basket will differ from the UK
Tesco has opened its first own-brand supermarket in China.

The UK giant already has investments in 46 Chinese stores under the name of its Chinese partner, Le Gou, which translates as "Happy Shopping".

Tesco's new store in Beijing is competing with other international chains that are well established in China, such as Wal-Mart and Carrefour.

Analysts said that Tesco's challenges included offering products that Chinese people would buy.

Market share

Chinese customers won't think of Tesco as British, but as another Western chain
Hana Ben-Shabat

AT Kearney retail consultant, Hana Ben-Shabat, told the BBC that opening under its own brand was a good move for Tesco.

"Chinese consumers are very open to foreign brands," she said.

"They won't think of Tesco as British - but as another Western chain.

"The Western supermarket chains are starting in the main cities, like Beijing, Shanghai and some others.

"I think the biggest challenge, in terms of gaining market share, is going to be how quickly all of them can move into the second-and-third-tiered cities."

Another challenge was understanding local consumers and their tastes, she added.

Separately, Chinese state media has reported that one of the country's biggest retailers, Beijing Wangfujing Department Store Group, has attracted the interest of two American investors.

Private equity groups Warburg Pincus and the Carlyle Group are among around 20 foreign firms vying for a stake in the company, the China Daily said.

A look inside China's first Tesco store

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