Charoen Pokphand Group has set its sights on education to develop its human resources in China, where it was the first foreign company to operate in a then relatively insignificant economy. 

After nearly four decades in China, CP Group - Thailand's largest agribusiness conglomerate with businesses ranging from poultry farming to operating shopping complexes - has started a non-profit enterprise to create leaders to sustain its Chinese operations.

The initiative's priorities include the retail sector, which is experiencing a human resources shortage as booming development soaks up the limited talent available in the country.

 

CP Group describes the retail sector as highly competitive and fuelled by multinational retailers flooding the mainland to take advantage of China's rapid growth.

 

The CP Corporate University (CPCU) had its soft launch late last year, offering its Co-op Project retail management courses to fresh graduates from Shanghai's leading universities.

 

Students experience actual implementation along with on-the-job training at branches of CP Group's Lotus retail chain.

 

Sixteen of the first intake of 53 students passed the programme, and they have now taken up managerial positions at Lotus outlets, said Somsak Hongsrichinda, the university's president.

 

In July, a second curriculum - Retail Management Trainee - was introduced and attracted 310 senior students from seven universities in Shanghai.

 

"The programme is not only about the retail business, but students will learn about the business philosophy of CP, its empires and networks around the globe," said Mr Somsak.

 

Although the programme places no obligation on students to work for CP Group, he said he was confident CP would be its graduates' first choice as employer. He added that they could seek jobs at more than 100 CP ventures in China that together employ more than 80,000 people.

 

Mr Somsak described the courses as a smart way to recruit capable personnel, given the Chinese retail industry's high turnover of around 20%-22% - a reflection of the heavy influx of leading multinational retailers like Carrefour, Wal-Mart, Tesco and Auchan over the past decade.

 

CP Group owns 79 Lotus hypermarkets in China - mainly in Beijing, Guangzhou and Shanghai - and in the early nineties introduced the huge Super Brand Mall retail complex in Pudong, Shanghai's main economic zone.

 

Mr Somsak, a former P&G executive in Thailand, said an outlet of Lotus normally employs from 500 to 1,000 staff, depending on its size.

 

In 2007, the National Bureau of Statistics put the value of China's retail sector at 8.9 billion yuan, a rise of 16.8% on the previous year. In the first seven months of this year the figure was up nearly 22% to more than 5.9 billion yuan.

 

China's recent rise in growth and consumption has been especially notable from 2002 to 2007 in the run-up to the 2008 Beijing Olympic Games.

 

The Kasikorn Research Centre said the capital's retail business has shown the biggest expansion over the past decade. The Games, which closed in Beijing on Aug 24, pushed up Beijing's retail business in the first seven months by more than 2.6 billion yuan, a rise of 21% over the same period last year.

 

According to the China Retail and Franchise Business Association, the value of the sector is expected to hit 10 billion yuan in the next two years, propelled by the 11th five-year economic plan (2006 to 2010) aimed at stimulating local consumption.

 

This will naturally increase demand for retail personnel. However, recruiting human resources can be hindered by cultural factors.

 

"One major problem in recruiting a workforce is that Chinese parents prefer their children to work in other fields, the favourite being economics. The retail industry is a kind of service and it is not very popular," said Mr Somsak.

 

However, he said that he and other instructors and coaches - who are executives and senior staff in the CP Group - would spread awareness of the retail sector's evolution to offer new business formats such as hypermarts, where many occupations were required, including finance, accounting, merchandising and even IT.

 

He added that students came from different faculties and needed to adjust to a new subject. Like many of their generation, they also reflect China's one-child family policy in being strong, self-confident, enthusiastic and assertive.

 

"Most importantly, they have to learn how to work with other staff and as a team," he said.

 

He said CPCU would evaluate its performance before adding any new courses next year. A lack of instructors and coaches could be a major obstacle to expansion.

 

Given China's strong retail sector, the Kasikorn Research Center believes plenty of opportunities remain for Thai retailers and entrepreneurs to invest in China. Possible areas include restaurants, spas, home decoration and gift shops.

 

However, the centre advises Thai operators to avoid fierce competition in the east of the country and to turn to second-tier cities in the west such as Kunming, Xian and Chongqing.

 

The research house also recommends that Thai businesses take account of risks such as escalating costs, local laws and regulations, and location. Strategies should be informed by thorough market research and operational plans should incorporate the different styles and behaviour of each market.

 

Central Retail Corporation, Thailand's leading retail chain, this year announced a plan to use 20 billion baht to expand its business in 15 cities in China, including Hangzhou city in Zhejiang province.

 Somsak: A smart way to recruit

 

Bangkok Post, September 27, 2008