The retailer, owned by tycoon Li Ka-shing, will open a 13,000-square-meter hypermarket in northern Shanghai's Yangpu District on Wednesday. The outlet comes on the heels of ParknShop's plan to expand its retail network outside southern China.

"The hypermarket will be our major focus after re-entering Shanghai for lower supply chain costs," said a spokeswoman surnamed Huang at the Shanghai ParknShop office.

"We adopted the same strategy when we entered new markets in the western and central part of China during the past year."

ParknShop, the largest supermarket retailer in Hong Kong, has opened two hypermarkets in Chengdu, Sichuan Province, and one in Wuhan, Hubei Province. It also plans to set up a store in Kunming, Yunnan Province.

In its key market in the Pearl River Delta, ParknShop runs more than 30 stores, about half of which are hypermarkets.

"While the southern region remains our major market, we don't want to give up on Shanghai, from which we retreated six years ago," Huang said.

Entering Shanghai in 1994, ParknShop was the first overseas-funded supermarket chain in the city. Its store number grew to a peak of 21 in the late 1990s, many of which were located in downtown areas such as People's Square.

The Hong Kong retailer was forced to sell most of its stores in 2000 to Royal Ahold NV - the owner of another supermarket chain called Ding Ding Xian - as a result of cash flow problems as China's retail regulations at the time barred overseas funds from being used to increase registered capital.

Those rules no longer apply.

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