This year's government work report promoted "going global" as a national strategy for the first time, encouraging Chinese enterprises to go global steadily and prosper in international competition. Yuan Yafei, CPPCC member and Chairman of Sanpower Group, is one of the very entrepreneurs who adhere to the route of "going global". This year, he has brought about the proposal entitled "Going out and Bringing in Promotes the Innovation of Business Model and Drives the Development of Retail Industry".

Yuan said that for Chinese businesses, going global entails a variety of risks. Previously, many Chinese enterprises failed due to social, economic, political, legal reasons, etc. In response, Yuan Yafei suggested that Chinese enterprises should alter their fixed pattern of thinking and abandon traditional concepts, and that they should not indulge in the idea of fusing the acquired enterprises by sending executives to take them over, which turns out rather offensive.

In contrast, Sanpower's strategy is to have the locals manage the acquired company. Yuan believes that it is not so much easy to fuse an enterprise as to develop synergically with it. "With the same owner, you can feel free to send Chinese executives to learn the corporate philosophy and management methods of the acquired company, and then apply the proper ones to your own enterprise, which is far more effective."

Last year, when Sanpower holding Nanjing Cenbest acquired the UK's 165-year-old royal department store House of Fraser (hereinafter referred to as "HOF"), a sea of doubts surged on the market, to the effect that the snake-swallow-elephant way of M&A can cause indigestion. Yuan, however, responded that over the past year the acquisition had already made four-fold achievements.

"First, HOF has a set of mature management models and market experience, which we've absorbed through the M&A. Secondly, the current situation haunting China is overcapacity, and the purchase of HOF means directly buying the UK market. Third, 60% of the production and processing of in-house brands came from China in the past, and 40% from India and Vietnam. Through the M&A, we have also secured the remaining 40%, and directly exported capacity. Finally, after the acquisition, HOF's sales have increased by 10%. In addition, on Meici.com, in which Nanjing Cenbest shows interest in investing, domestic customers have been able to buy pure HOF merchandise within the country. Therefore, the M&A is genuinely a reciprocal move.” Yuan Yafei further explained.