March 1, 2015, Beijing. Prince William  arrived at the Beijing Capital International Airport, starting his 4-day trip to China for the first time.

On March 2, Prince William of the UK will turn up in Shanghai in his first visit to China, and attend the opening ceremony of the GREAT Festival of Creativity–the feature event in China-Britain Culture Year.

As a sponsor of this event, Yuan Yafei, founder and Chairman of Sanpower Group in China's Nanjing, will accompany the prince.

William's trip is regarded as the highest specification in UK royal family's visits to China for nearly 30 years. Yuan Yafei was invited to partake of it mainly because last year he acquired House of Fraser, a  time-honoured department store in the UK.

House of Fraser to metamorphose in China

In 2014, Sanpower Group holding Nanjing Cenbest bought 89 per cent of the shares from the UK's time-honoured department store House of Fraser at 155 million pounds, which has created the largest overseas acquisition in China's retail industry.

Subsequently, Yuan Yafei engaged Hong Jianshan, a Singaporean who previously served in the Isetan Department Store, in his business, preparing to introduce this royal-commended and authorised store to China.

By virtue of the GREAT Festival of Creativity, House of Fraser will see its début in China.

Hong Jianshan, who is now Executive Vice President of Sanpower Group, told the Paper that he is also Head of the preparatory group of House of Fraser China. He added that this time-honoured department store from the UK has been branded as "Oriental Fraser" in China, with the design and construction of entity shopping malls in full swing. The first batch of shopping malls will appear in Nanjing, Chongqing, Xuzhou, etc., projected to open in 2016.

As envisaged by Yuan Yafei, Orient Fraser will be the boldest try of domestic department stores to transit from concession to buyers mode, which will completely overcome the problems that have been plaguing domestic department stores, namely, identical commodities, exorbitant prices, discounted new products.

Buyers mode in China: blessing or curse?

There has been a consensus among China's department store businesses: under the impact of high rents and labour costs, the concession model of department stores, which rent the zoned shopping malls out to brands as the "principal tenant" and lack technical contents, is standing slimmer chances of sustainable profits.

A senior person within the industry revealed to the Paper that currently the status quo of domestic department stores is that without their own properties, they will basically run at a loss.

Hong Jianshan said that being aware of this problem, Sanpower Group had determined to buy the UK's department store, and hereby inaugurated the road for transformation of domestic department stores.

Hong Jianshan said that their overall philosophy is that with 50 per cent of in-house brands, reasonable prices and higher profits can be guaranteed, while the remaining half will still take the concession model, in case the in-house brands were not accepted.

In addition, the suppliers of House of Fraser concentrate on the Asia-Pacific region, and last year's suppliers' conference was held in Hong Kong. Hong Jianshan said that they would discuss with suppliers so as not to copy the sizes and styles of the UK. When the time is right, the goods can no longer be imported from the UK; instead, they can be shipped directly to China by suppliers so as to reduce the costs.

The idea sounds beautiful; however, even if it is implemented without compromise, there still lies the biggest risk, i.e., to what extent domestic consumers will accept the alien brands. Therefore, in addition to merchandise selection, marketing tactics also matter much.

Sanpower Group seems to be well versed in this – early in the construction of physical stores, they have bought Meici.com, with a view to launching some British goods from House of Fraser on the site for sale, so as to figure out consumers' preferences.

Hong Jianshan said that the Orient Fraser will follow the pace of Sanpower Plaza to pursue chain development in China. "If we can make a difference, we will hopefully be listed overseas in 3 to 5 years. ”