The Intime Department Store chain is one of Shen Guojun's favorites among his business offspring. When he talks about it, his eyes sparkle.
"It gives me the access to lots of new and fashionable things. To some degree, it makes people more light hearted than building houses and mining coal," Shen says.
His Intime Department Store (Group) Co Ltd was listed in March this year in Hong Kong, making it the first privately owned department store on the mainland to list in Hong Kong.
The company raised HK$2.7 billion through the listing. The capital will help fund his ambitious expansion plans for the department store chain.
Even with seven outlets in Zhejiang Province, Shen believes the affluent region still has significant potential for his future plans and can support nearly 20 new stores in the next five years.
"Zhejiang is one of the richest provinces in China. There is huge market potential not only in big cities like Hangzhou and Ningbo, but also in small ones such as Yiwu, Shangyu and Zhuji," Shen says.
"We will open at least two new department stores in Hangzhou next year. At the same time we will enter smaller cities in Zhejiang."
He also plans to expand to other parts of the country by opening his own department stores and merging with or acquiring existing ones.
In Beijing, Shen will team up with Lotte Shopping Co from South Korea to open an 80,000-sq-m department store on Wangfujing street next year. Intime Department Store and Lotte will take equal stakes in the new store, which will be the South Korean company's maiden outlet on the Chinese mainland.
The two companies will reportedly initially invest about $10 million in the store, which will probably be named Lotte Intime Department Store.
Lotte is South Korea's biggest department store operator. It controls 44 percent of South Korea's 16.5 trillion-won department store market and 12 percent of the country's 21.5 trillion won discount sector, according to Bloomberg data.
Shen says he is considering expanding his partnership with Lotte into other Chinese cities.
China's retail market has been growing at least 10 percent annually since 1997 and that trend is expected to continue in the next five years, while South Korea's retail market expanded only about 2.5 percent annually through 2008.
"The population of South Korea is similar to that of Zhejiang Province, but Lotte alone achieved more than $10 billion in sales last year," Shen says.
"It is easy to imagine how big the Chinese retail market would be 10 to 15 years later when Chinese people's purchasing power reaches that of South Koreans."
China fully opened its retail sector to foreign companies at the end of 2004 as part of its commitment to its World Trade Organization membership. Retail giants such as Wal-Mart and Carrefour have opened hundreds of outlets in the country.
Shen believes Intime Department Stores have found their own niche market by selling mid- to high-priced fashion products that target young ladies.
"We don't open hypermarkets. That is something Europeans and Americans are good at, while Asian people have advantage in running department stores that have strong personalities and cater to local culture," Shen says.
"Chinese department stores need to learn a lot from leading Asian department store operators in how to position themselves in the market and how to manage their business," Shen says, explaining the reason for his partnership with Lotte.
"The management experience and the excellent talent pool of Lotte is what we value," he notes, adding that the manager of the Lotte Intime store will be sent by Lotte.
Although Shen spends most of his time in Beijing where China Yin Tai's headquarters is located, he still visits his department stores in Zhejiang to give employees "surprise tests".
He strolls down one of the outlets like an ordinary customer and checks if the cashier wears rings or whether her shirt is dirty around the collar.
"It is impossible for me to manage every detail of the business, but I occasionally check how our management systems and rules are carried out," Shen says.
