As operation manager of Shanghai Sincere Daily Stop Chain Corp, Li is busy handling a big load of paper work while, now and then, being interrupted by colleagues with business inquiries.

"Things just keep coming up constantly so that you can seldom take time for a breather," said Li, in a joking, grumbling tone.

Behind the busy scene presented by Li and her co-workers is a lot of preparatory work undertaken by Sincere in its ambitious effort, as a late newcomer, to elbow its way into the local convenience store market.

Brave comeback

It was not an easy decision for Sincere, a Hong Kong-based retailer, as it had to shake off the bad memories of its previous aborted local department store business and its sensational retreat from the city eight years ago.

But it seems that Sincere is resolute in its determination to stage an eye-catching comeback.

In setting up the local business last year - where Li is now working - as the subsidiary to run its local operation, Sincere intends to invest at least 20 million yuan (US$2.42 million) in the convenience store business.

Besides establishing franchised outlets and those operated directly, Sincere is also taking over around 60 outlets from Seven Colours Room, a retail chain for electronics products run by Shanghai Boning Trade Co Ltd, and convert them into convenience stores.

Having opened more than 50 outlets around the city since last November, the company expects to develop a network of 800 outlets in three to five years, saying that it would rely on sheer scale of its operation to make money.

Stormy market

Sincere is by no means alone in being in such a rush - a number of local companies have also gone headlong into the convenience store business.

Statistics from the Shanghai Municipal Commercial Commission indicate that the number of local convenience stores jumped from about 1,000 in 1997 to more than 3,000 last year, involving various operators such as Kedi, Alldays, Lawson, Lianhua Quik, Liangyou and Meilin 85818.

The booming convenience store business is against the backdrop of the galloping leap in local chains' commercial operations. Their total sales volume rocketed from 14 billion yuan (US$1.69 billion) to 70 billion yuan (US$8.46 billion) in the 1997-2002 period, according to Cai Hongsheng, director of the commission.

The market has developed to such a stage that the slightest move by any operator can arouse a big stir among all the others.

Earlier this month, Shanghai Liangyou Chain Store Co Ltd announced that it had received a 70.2 million yuan (US$8.5 million) cash influx from Shanghai Xinmen Investment Co Ltd, and will be renamed Shanghai Buddies CVS Co Ltd with a registered capital of 180 million yuan (US$21.8 million).

Regarded by some analysts as a prelude to Liangyou forming a joint venture with some foreign company, the move seems to echo earlier media reports that US giant 7-Eleven, the world's largest convenience chain operator, has completed a deal to buy a 30 per cent stake in Liangyou.

But He Tao, general manager of Liangyou Group, parent of Liangyou Chain Store, later denied such speculation.

In a telephone interview, Lillian Lin, spokeswoman for Taiwan-based President Chain Store, which operates the 7-Eleven business in Taiwan on a franchise basis, also rebutted rumours that President has acquired operating right in Shanghai under the 7-Eleven brand and her company right now has no plan to enter the local convenience store sector.

However, analysts say foreign investors would not be content to just stand as onlookers besides such the big market.

To some extent, the number of convenience stores citywide - some 3,000 - indicates an almost saturated market, shown by many back-to-back convenience stores vying for business in some parts of the local downtown area.

But, in the longer run, there is still room for market growth.According to Qi Xiaozhai, senior industry analyst with the Shanghai Commercial Information Centre,that is quite possible because of the further urbanization in the city, better purchasing power of locals.

However, analysts cautioned that all the companies involved should remain sober-minded and try to tackle the serious problem of how to maintain market development on a healthy and profitable track.

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