Hong Kong-based China Resources (Holdings) Co Ltd, a conglomerate with major investments in the real estate, trade and retail sectors, has taken over 20 percent of a major local hypermarket operator, insgroupsto tap Shanghai's retail market.

　　China Resources paid 80 million yuan (US.6 million) to buy 20 percent of Hualian group GMS Shopping Center Co Ltd, a subsidiary of Hualian (group) Co Ltd, said an official with Hualian group's development department who requested anonymity.

　　Hualian group was merged in April into Shanghai Bailian (group) Co Ltd, China's biggest retailer with total assets of 28 billion yuan.

　　Before the takeover by the Hong Kong conglomerate, Hualian group and Hong Kong-listed KPI Co Ltd, an investment holdings company, were the 50-50 shareholders of GMS Shopping Center, which was established in 1998.

　　After the acquisition, the two major shareholders now each own 40 percent of the hypermarket, said the official.

　　China Resources was not available for comment yesterday.

　　Hualian GMS Shopping Center now has 19 stores across China. Among them, 13 are located in Shanghai. Last year, the retail chain's sales reached 2.2 billion yuan.

　　Industry insiders say China Resources has long planned to make inroads into Shanghai's retail market, but cut-throat competition has made it hesitate until recently.

　　"China Resources has been committed to investing in the retail sector. The share purchase in GMS is its first step to march into Shanghai's market," said Lu Ying, an analyst with Haitong Securities.

　　She said overseas retailers usually cooperate with a local partner when investing in Shanghai's retail industry, because localization is one of the key factors to be successful in the Chinese mainland market.

　　"China Resources' partnership with the state-owned Hualian group will benefit its future development in the mainland market," Lu added. "The company is likely to increase its share percentage in GMS to enhance its presence here in the future."

　　China Resources bought Shenzhen-based Vanguard Department Store Co Ltd in 2001 to open one-stop shopping centers in Shenzhen, Guangdong Province.