QINGDAO, Shandong: Forty Chinese building material malls and supermarkets joined forces with 3,000 international suppliers yesterday in a push to form a logistics and purchasing coalition to reduce costs and sharpen competitiveness.

Also yesterday, 33 of the local malls in the coalition agreed to bulk-buy from the Qingdao Tianyue International Building Materials Free Trade City, which has started centralized purchasing from overseas suppliers.

Free Trade City organizers said detailed rules for the move would be released in late December. Centralized purchasing and delivery requires an advanced information system, strong logistical backup, capital strength and broad sales networks.

"But none of the alliance members has them all," said Cai Kaishun, chairman of the Tianyue International Logistics, the investor of free trade city.

Long Junsheng, an associate professor with Beijing University, said: "The essence is to cut purchase costs through centralized procurement. Then we deliver directly to our clients to reduce logistical costs."

Cai said Free Trade City's sales are expected to hit 500 million yuan (US$60 million) next year. Li Qingyun, deputy director of the China Society for Building Materials Markets, said: "The coalition will be a demonstrative business model."

(china daily)