Chinese building materials and homewares company China Lesso Group Holdings is opening its first exhibition space in Australia today, as it makes a push into the local market.
Lesso Home will open a 30,000sq m centre in Greenacre in Sydney’s west, reportedly investing at least $20 million, with more than 60 tenants, focusing on trade buyers including home builders and interior designers.
As first revealed by The Australian last year, the Hong Kong-listed manufacturer of hardware, building materials and electrical equipment is expanding into the local market after warning of challenging conditions in China.
The group is planning to open another outlet in Australia in early 2018, focused on lighting and furnishings, and has plans for other home building offerings in the future.
The expansion has prompted comparisons with Wesfarmers-owned Bunnings, although the new centre will have a slightly different model.
The new Lesso Home at Mayvic Street, Greenacre, which the group leased earlier this year, is just blocks from a Bunnings outlet. “Our offering in Sydney is a trade-focused outlet, rather than a consumer-focused outlet, that brings more choice to Australian businesses,” said Victor Lin, vice-president of China Lesso Group.
“China Lesso Group products are already widely available in Australia from a number of outlets and Lesso Home is bringing all these products under one roof.”
The group planned to expand further in Australia as part of a larger global strategy over the next five years, he said.
Last year, China Lesso bought the St Hilliers Estate in the western suburb of Auburn and a major block of land in the outer suburb of Huntingwood East, which will serve as a longer-term distribution hub.
Dr Lin said the group was “currently working on plans” for its Auburn site. Melbourne was also “high on the list” for further locations in Australia.
The push into Australia also comes after US-based eCommerce giant Amazon announced plans to open here.
The move into Australia could be driven by hopes of diversifying from manufacturing into eCommerce, after it set up the Lesso Mall platform in China in 2015. China Lesso said its local launch would offer more choice and competitive prices to Australian consumers and businesses.
“Lesso Home is inspired by the array of premium Chinese design and manufacturing products. We believe China has much to offer Australian businesses, assisting them to compete and deliver the best performances for their customers,” Dr Lin said. “Sydney is just the first step and China Lesso is looking to open more locations across North America, the Middle East and Asia.”
By ELIZABETH REDMAN and BEN WILMOT
The Australian Business Review