China’s leading hypermarket operator Sun Art Retail Group has reported a 26 per cent jump in profit for the nine months to September.
Sun Art, which operates hypermarket brands RT-Mart and Auchan, said net profit rose to 2.18 billion yuan ($357.8 million) on 11.7 per cent revenue growth.
The retailer has seen its third quarter net profit grow 70 per cent to 604 million yuan.
Competition in China’s hypermarket sector is becoming tougher and has led retailers to consolidate. British retailer Tesco and China Resources Enterprises are combining their Chinese stores while Wumart has agreed to buy 36 CP Lotus, owned by Thai company Charoen Pokphand.
Such consolidations pose challenge to Sun Art’s share of China’s hypermarket sector. To offset the tough competition from other bricks and mortar retailers, Sun Art has collaborated with Taiwan External Trade Development Council to launch a shopping site Feiniuwang dedicated to selling luxury products.
While competition is tightening, the hypermarket sector has still a lot of growth potential, projected by Euromonitor to grow to 863.8 billion yuan ($142 billion) by 2015, from an estimated 659.6 billion yuan in 2013.