Retailer Bailian takes top sales revenue spot

The Shanghai-based retailer Bailian Group Co Ltd overtook Nanjing-based Suning Appliance Co Ltd last year to become the largest operator of chain stores measured by sales revenue in China, according to a report released by the China Chain Store and Franchise Association.

The association's report said Bailian had 118 billion yuan ($18.7 billion) in sales revenue last year after adjustments were made to ensure the figures were comparable between companies.

Suning and Gome Electrical Appliance Holding Ltd tied for second place in the ranking, each having 110 billion yuan in adjusted sales revenue in the past year.

The previous year, Suning had reported the largest sales revenue among chain-store operators and Bailian had reported the third-largest.

Last year marked the first time in the past six years that electrical appliance retailers ceded the top spot for sales revenue. From 2006 to 2008, Gome had enjoyed the largest revenue and Suning had in 2009 and 2010.

The association said some adjustments were made to its calculating methods to ensure last year's revenue figures could be fairly compared with each other. As a result, some of the numbers differed from what appeared in the companies' financial reports.

For instance, Gome reported that it had 59.8 billion yuan in sales revenue last year. But through the addition of revenue generated at Gome stores that are not assets of the publicly listed part of the company, the association's report credited it with having 110 billion yuan in sales revenue.

The top 100 operators of chain stores in China, measured by sales revenue, together generated 1.65 trillion in adjusted sales revenue last year, the association said.

Experts said the business of operating chain stores has undergone significant changes in recent years. That has been the result, mostly, of shifts in consumer habits.

"An increasing number of middle-class people are providing opportunities for companies," said Guo Geping, chairman of the association.

"Companies need to consider the situation carefully and find the right solution for the possible change," Guo said.

In the past decade, companies have largely pursued a strategy of opening stores to give themselves a larger presence in China. Guo said companies should pay more attention to strengthening their competitive advantages.