Hualian, China's second biggest grocer, plans to open 20 hypermarkets over the next two years in 13 cities in an attempt to win first-mover advantage, ahead of further incursions by big foreign groups.
At present, the 1,000-strong supermarket business has just 11 hypermarkets, which are approximately 10 times the size of its standard supermarkets.
A Hualian spokesman told local press: 'We hope the expansion will strengthen our competitive edge and fend off the threat from domestic and foreign enterprises.'
M+M Planet Retail analyst Rob Gregory said that the biggest Chinese domestic grocers all want to expand aggressively.
He added: 'All of the major local players are pushing for expansion, particularly with hypermarkets, which will be the major growth vehicle.
They need to move now to get substantial market share that will protect them in the next few years.
Local players are also looking outside major cities for the first time, because the foreign competitors, such as Wal-Mart and Carrefour, are going for the major cities like Shanghai and Beijing.'
Gregory said Carrefour must be regarded as the leading international player in China, because it has best-tailored its stores to local needs. The French retailer has 27 hypermarkets in the country, and Wal-Mart has 20.
Tesco has also been looking at China for the past couple of years, but has yet to make a move.
With 1.3 billion consumers, China's economy is growing rapidly and is emerging as a retail battleground in sectors such as DIY and furniture, as well as food.