China 3C Group Enters Promising Partnership with French Retailer

China 3C Group (CHCG.OB) announced Wednesday that it will partner with Carrefour to open stores within the French retailer's outlets in China. This is exciting news. Carrefour may be the fastest growing foreign retailer in China, with sales surging 53% to 24.8 billion yuan (US$3.3 billion) in 2007, trumping Wal-Mart's (WMT) 30% growth for the same period and a 14% rise for the overall Chinese market.

Carrefour started its operations in China in 1995 and has since built up a network of over 100 superstores. It is targeting to expand at a rate of 20-25 stores a year.

While the details of the partnership are to be revealed, the company's stated goal of getting to 1000 stores is now clearly within reach, even if it missed its 2007 deadline. And beyond the expansion of distribution reach, this deal really ups CHCG's reputation and brand awareness, which should position it well for future growth.

My Position: Long.