Multinationals moving to inland China

XIAHE, China | Fri Dec 10, 2010 - A clutch of companies has recently announced plans for a sales drive in smaller Chinese towns and cities where they see potential for strong revenue growth.

Here are some of those expanding into the less prosperous interior. -- German sports goods company Adidas AG (ADSGn.DE) plans to open more than 2,500 stores in smaller Chinese cities by 2015, expanding its coverage to 1,400 cities from 550 now. It is even looking at Tier-6 and Tier 7 towns, the bottom rungs of the administrative and retailing ladder.

-- Tesco (TSCO.L), the world's No.3 retailer, plans to quadruple revenue in China over the next five years by more than doubling its number of hypermarkets to more than 200, including a push into second- and third-tier cities. In addition, other foreign companies continue to move into the Chinese market.

-- American retailer Gap Inc (GPS.N) and U.S. steakhouse Morton's Restaurant Group Inc (MRT.N) opened their first outlets in China in November. -- French department store operator Galeries Lafayette will open its first store in Beijing in 2013 and is planning a total of 10-15, including in second- and third-tier cities, in the next five years.

(Reporting by Alan Wheatley; editing by Bill Tarrant)

(Created by William Tarrant)