The Foxconn Group's channel retail subsidiary, Cybermart, in China expects to expand its number of stores from 34 currently to 50 over the next five years and will compete directly against Taiwan-based Clevo's Buynow retail chain, according to industry sources.
Cybermart is targeting to increase its store numbers by four in 2010. Two of the stores will open soon after the Lunar New Year in February, while the third store will open in the third quarter and the last store by the end of the year.
Cybermart will mainly open mall-style stores with each location having a total area of more than 10,000 square meters and thus opening retail space for IT vendors to rent and sell their products, similar to the strategy of Buynow.
In the future, Cybermart plans to offer retail space to non-IT businesses and upgrade stores to run complex businesses.
In addition to increasing its number of stores, Cybermart will also evaluate its existing stores and will close down ones with unsatisfactory performance.
Meanwhile, Buynow currently has 18 stores and plans to expand the number to 23 by the end of 2010.
However, with real estate prices in China rising rapidly, managing rental costs will become a major task for Cybermart as the company mostly rents its buildings. The company is currently working with construction firms to evaluate the possibility of building its own buildings to save costs.
With Buynow owning 15 of its 18 stores, increasing real estate prices have help bring in profits for the company; however, the company will start face increasing costs when expanding new stores, the sources added.
Article translated by Joseph Tsai
