China Appliance Chain Eyes Rural Expansion

Suning is planning a massive expansion into rural markets, more than doubling its number of stores and overtaking rival Gome.

China's second-largest home appliance chain Suning is planning a massive expansion into rural markets, more than doubling its number of stores and overtaking rival Gome, state media said March 24.

Suning will open at least 1,000 stores in medium-sized cities, targeting nearby rural populations as it takes advantage of new policies aimed at boosting domestic consumption, the China Daily reported.

"Suning will open at least 1,000 stores in the third- and fourth-tier cities within five years," company president Sun Weimin was quoted as saying.

The company hopes that reaching out into the countryside will help it gain the upper hand over Gome, the industry leader which has 1,300 stores nationwide, the paper said.

Suning has 812 stores across the country and late last year announced plans to open another 200 in 2009.

It is now betting on a new government program to subsidize farmers' purchases of home appliances, the China Daily said, adding that the rural market had more potential than urban areas. More than 70% of families in the countryside have an annual income of more than 5,000 yuan (US$732), according to a recent survey of 15,000 people by Suning and a Beijing research firm, the paper said. "The survey is a positive signal and will help us to better develop the market," the China Daily quoted Sun as saying. The cheapest laptop on Suning's website is priced at 2,297 yuan.

Copyright Agence France-Presse, 2009

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