ABSTRACT
This chapter examines how effective the state efforts have been in nurturing domestic champions to compete with the aggressive international retailers and to fend off foreign competition. The chapter recounts the creation and rise of the domestic retail giants, analyzes their business operations including the degree of market penetration, and comments on the challenges that they have been facing in the new retail economy. The boldest move was to invest in Dashang Group in 2005 by acquiring 60 percent of Dashang International for 720 million yuan. Suguo was acquired by China Resources Vanguard. Shandong Sanlian was acquired by Gome. The Bailian Model was more faithfully mirrored in Wuhan-the capital of Hubei Province and a Tier 1 city in Central China. Two of the 20 national team members, Wushang Group and Zhongbai Holdings Group, are based in Wuhan, and both are also government controlled.
