The world's retail giants, not to mention China's top leaders, closely monitor the fortunes of the country's richest man, Huang Guangyu, 36, a retail-electronics entrepreneur known as the "price butcher." The reason: as Huang goes, so goes China's policy on foreign retailers, who can't wait to take on the locals. Huang is a classic Chinese rags-to-riches story. At age 16, with just a ninth-grade education, $500 in seed capital and indefatigable drive, he set up a roadside stall in Beijing to sell radios and gadgets purchased from factories near his hometown in southern China. By beating rivals on price and expanding rapidly, Huang has for the past two years led Euromoney's list of China's richest people. He has a personal fortune of $1.7 billion and runs a chain of 420 stores in his Hong Kong-listed Gome Electrical Appliances Holdings Ltd.
Huang's business sits in the crosshairs of China's evolving free-trade policy. Under its World Trade Organization accession agreement, China has had to open its doors to global retailers; Wal-Mart, Carrefour and others are rushing in, gobbling market share from China's fragmented and often inefficient retail chains. Former Premier Zhu Rongji figured that if local companies could not compete at home against the world's best, China would never be able to establish its own multinationals and global brands (although officials are also quietly building barricades to slow the foreign assault).
Huang's Gome Electronics is China's largest electronics retailer, but its market share is only 5%. Wal-Mart, with more than 50 stores in China and plans for hundreds more, is a formidable competitor, and Best Buy is setting up "lab" stores to gauge consumer tastes before rolling out its ambitious China plans. But Huang isn't sitting still. He reckons to add 200 stores this year through expansion and the acquisition of smaller retailers. And, after all, he is the home team. "When the foreign players start making their presence felt," he told an interviewer, "we'll be ready to take them on."
McGregor is the author of One Billion Customers: Lessons from the Front Lines of Doing Business in China