[ CHINA & ASIA ] Franchising Rides Wave of Economic Expansion in Asia and Pacific Rim
If one works for a franchise system that either is franchising internationally or which is planning international franchise expansion, he undoubtedly has been evaluating opportunities and where to place the company¡¯s development resources. Unless that person has been living under a rock, he must have considered, at least in passing, the attractions of the economically-talented Chinese and Indian markets, each with a population of more than one billion people. The Japanese economy has had its problems, but that it has embraced franchising since the 1970s. A franchise system may have considered franchising in Australia or New Zealand, countries with a language and legal system similar to that in the United States.
While everybody is talking about opportunities in the region, are any franchise companies able to go there and operate profitably? Do countries in the region have a pool of qualified prospective franchisees? Do enough people have the purchasing power needed to make a franchise program successful? Does anyone there really understand franchising? Can franchising operate under the laws of these different countries?
...More...[ CHINA & ASIA ] From Yangshan to the World
The white-carpeted, formal room where Chen Xuyuan speaks to visitors, on Xiao Yangshan island, is a busy place. Mr Chen, president of Shanghai International Port Group, plays host to a constant stream of dignitaries from elsewhere in China eager to see the container port Mr Chen'S company has built on the rocky island, linked to the mainland by a 32.5km bridge. It is one of the most audacious engineering feats even in a part of China which excels at them.
However, Mr Chen makes it clear that he wants to extend SIPG'S reputation and turn the company into an important international container terminal operator. The strategy came to wider attention last year, when SIPG unexpectedly took a 40 per cent stake in a new container terminal constructed by Danish-owned APM Terminals, part of the AP Moller-Maersk Group, at Zeebrugge in Belgium. The investment was the company’s first outside China.
The Zeebrugge investment was the first step in pursuing the goal ?set for the company by the Shanghai municipal government, which owns 70 per cent of SIPG-of turning itself into a big international terminal operator. "If we want to become a global terminal operator, it's not enough," Mr Chen says of the Zeebrugge investment. "But the goal isn't something we'lll achieve in a short period of time."
SIPG's pursuit of international expansion will take it down the same route as three of the existing four biggest international container terminal operators --Hong Kong's Hutchison Ports, Singapore's PSA and Dubai's DP World. All started from a base in one of the world's busiest container ports and used them to build up reserves of finance and expertise which were used to buy or build assets elsewhere.
Two of the big operators -PSA and DP World -are owned by arms of their state. Mr Chen says he sees no immediate prospect of the municipal government's reducing its stake. The holder of the remaining 30 per cent is the listed China Merchants Group. Mr Chen accepts SIPG shares features with other big port operators. But it also has unique characteristics, especially its position as the port serving the lower Yangtze River, which passes through some of China’s fastest-growing, most dynamic areas, he says....More...
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