GOME Electrical Appliances Holdings Ltd, China's largest electronics retailer, aims to boost its share of the nation's cell phone handset sales to more than 15 percent from less than 10 percent in two years.
"This market is very important - Gome's market share isn't big enough," President Chen Xiao said in an interview in Hong Kong yesterday. "We hope that through acquisitions we can bring industry experts into our company and increase our market share to more than 15 percent in one or two years."
China, the world's biggest wireless-phone market by customers, had 565.2 million users at the end of February. Hong Kong-listed Gome, which competes with Suning Appliance Co and Best Buy Co, expects the introduction of third-generation services to boost demand, Chen said.
The company is maintaining a target of adding 300 to 450 cell phone shops this year, he said.
"It's a good strategy," Duncan Clark, chairman of researcher BDA China Ltd in Beijing, told Bloomberg News. "More and more people are buying their phones through large retail chain stores, rather than small shops."
Selling shares
Gome last week reported a 38-percent increase in 2007 profit to 1.13 billion yuan (US$162 million) and said it plans to spend 2.2 billion yuan on expanding.
The company was founded by Huang Guangyu, ranked by Forbes magazine last year as the 10th-richest person in China. Huang is seeking as much as HK$2.2 billion (US$282 million) selling shares in the company, according to an e-mail to investors on Friday.
Gome last month agreed to buy a 10.7-percent stake in Sanlian Commerce Co, which has more than 100 stores in eastern Shandong Province. Chen said the company wasn't currently planning to increase the stake.
In December, Gome said it would finance a partner's 3.6-billion-yuan acquisition of Beijing Dazhong Home Appliances Retail Co Ltd with an option to buy the whole of the company later.
Gome is seeking "cooperation" with foreign retailers to learn from their experience, Chen said, without being more specific.
The retailer has no plans to sell shares to overseas investors to bolster the company against competition from global retailers such as Best Buy, Wal-Mart Stores Inc and Carrefour SA, he added.