China Resources Enterprise, Limited (¡§CRE¡¨) is strongly committed to market share development for each of its consumer business. Market share together with economy of scale can lead to operational efficiency in order to generate or preserve value over the longer term.

CRE strives to become the largest consumer goods company in China. We endeavour to bring quality lifestyle to our consumers from our retail, beer, food and beverage business. China is a developing country with considerable population. In order to capture the largest growth momentum of the consumer industry in China, we formulate our strategy by the following aspects: (1) national expansion through both acquisitions and organic growth; (2) teaming up with international players where circumstances allow; and (3) catering for different consumer preference in different regions.

(1) National expansion through both acquisitions and organic growth
We believe that scale will bring in long-term sustainable profitability. As compared with international mature countries, the industries of our businesses in China are still fragmented. To increase our presence, we will undergo organic expansion as well as actively seeking for any opportunity on acquisition to accelerate our expansion in China. We believe that our well-established nationwide distribution network is one of the key elements for the success of a consumer goods company in China.

(2) Teaming up with international players where circumstances allow
In view of huge potential in China, it is beneficial for us to build up long-term partnership with international experienced players. They can share their experience as well as bringing in techniques to the businesses. The relationship will be a win-win situation for both parties to capture robust growth in China.

(3) Catering for different consumer preference in different regions
Due to the history and different development in numerous regions in China, we understand that the consumer preference vary in different regions. To become the largest consumer goods company in China, we hope to satisfy the needs from various consumers. We exert the following methods to capture:
(i) Provision of a variety of services and products
In retail business, we would like to offer multiple formats to our consumers in providing unique and sophisticated shopping experience. Our formats include hypermarket, supermarket, convenience stores, high-end supermarkets and other specialty stores. Similar to other mature Asian countries, we believe that consumers require differentiation on their shopping. In beer, food and beverage businesses, we would like to provide blended product mix with various segments so as to provide more choices to our consumers.
(ii) Quality first
Facing with raising conscious on quality for consumers in China, we stress on the quality of our products as one of the top priority in our businesses. Besides, we adopt trade-up strategy for our retail business in offering better quality products to our consumers.

As the consumer goods industry in China becomes more mature in the long term, the above initiatives would facilitate us to achieve our mission. Our historical track record also illustrated that we are on the path to the success. On the other hand, our management will review and adjust the above initiatives continuously in case when any unexpected market situation emerges.