M&S has to think small to make it big in China

Custard creams, salt and vinegar crisps, fish and chips and possibly the most iconic knickers in the world came to Shanghai's high street today as Marks & Spencer opened its first branch in mainland China.

Hundreds of Shanghaiese and expatriate shoppers queued along the upmarket shopping street Nanjing Road waiting for the British retailer to open its doors, and stormed to shop to buy the products so familiar to UK shoppers and so sought-after in China.

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Marks & Spencer bosses are hoping the Chinese store will help it to lift its results, and the opening took place as the company revealed its worst performance for three years, with like-for-like UK sales down by over six per cent in the last three months.

There were no such concerns in downtown Shanghai, where the crush was so great that the management had to stop people coming in to check out the shop, which is Marks & Spencer's biggest store in Asia at 40,000 square feet over three floors.

There was a major jam in the food section, as people stocked up on Double Devon Toffees, digestive biscuits and Fisherman's Pie.

A Marks & Spencer paper carrier bag was the chic item to have in Shanghai and it was remarkable how quickly the distinctive green coloured bags spread through the city.

Shoppers were delighted at the staple brand's arrival in China, although some were a little concerned that the sizes might be too large for the more petite Chinese woman.

"I heard about Marks & Spencer before. I like it, I like the food section and the clothes, and I will definitely come again. The only thing is that some of the styles are a bit old for me – and they are too big. The sizes start at size eight, and that's big for China," said Lu Yanhua, 20, from Shanghai.

Carl Leaver, head of international strategy at M&S, said China offered a major opportunity for expansion. The group currently has 300 stores in nearly 40 countries, and has been in Hong Kong for 10 years.

"We're not about taking huge risks with shareholders' money. This is a significant first step. This is part of a long-term plan and this means our earnings are less affected by any single market. And look at the queues here – there are fantastic opportunities here," said Mr Leaver.

The group is hoping to make waves among China's increasingly affluent middle-class consumers. And Shanghai's thousands of expatriates are also going to be regular customers by the look of things. Australian engineer Morgan Strain was browsing in the underwear section.

"It's a good addition to Shanghai, it feels like a bit of home, and it's sure to do well," said Ms Strain, 23.

Also picking up some familiar goods in the store was Tony Jowett, director of global sourcing at another British retailer which has recently opened in China, Mothercare.

"China is a massive opportunity," said Mr Jowett.

The Shanghai store is the first step in what M&S hopes will be a major engagement in China – the company wants to open up to 50 stores in the country - part of a broader plan to make the company more international.

"The aim is to build quickly. The plan is not over five or 10 years but much quicker. There are 1.3 billion people here, one billion in India. These are two markets we're in. If one in eight of the Chinese population ends up wearing Marks & Spencers' knickers, then we'll be happy," said Mr Leaver.