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China's stock rout won't dent consumption: Retailer

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China's stock market turmoil will not lead to Chinese households tightening their purse strings, the executive chairman of Zhongmin Baihui Retail Group told CNBC.

"The luxury segment may take a dent, but in general, the impact should be negligible, especially in the fast-moving consumer goods (FMCG) space," said Lee Swee Keng, a Singaporean who heads the retail company, which runs 12 shopping malls in the southern Chinese province of Fujian.

A rise in stock prices usually boosts the wealth of investors and the improved sense of financial security tends to bump up consumption, commonly defined by economists as the "wealth effect." This increase in spending theoretically results in higher incomes and profits which in a virtuous cycle eventually supports economic growth. But the tumble in mainland equity markets last month raised fears that the opposite may occur and complicate China's transition from an economy anchored on exports and investment to one driven by the consumer.

However, Lee, who was speaking to CNBC at the "FutureChina Global Forum 2015" in Singapore, remains bullish on the potential of China's 1.3 billion consumers and advises market watchers to be patient.

"This country has one of the world's highest household savings rates, while travellers have gone overseas to spend $164.8 billion last year. The Chinese have great potential to be huge spenders," he said.

"To unlock this potential, Chinese companies must boost innovation to win over consumers. Private enterprises are feeling the heat from foreign competitors, such as Japan's [casual-clothing line] Uniqlo, and will eventually invest more into innovation. With better products, domestic consumption will be lifted. But just like any economic transition, this takes time," he said.

Read MoreChina's consumers go local for daily necessities

Is e-shopping a bane?

Meanwhile, the explosive growth in China's e-commerce sector has thrown up a plethora of challenges for brick-and-mortar retailers, but Lee believes that traditional mall operators, such as Zhongmin Baihui, can still put up a fight.

The preference for trying on clothing or seeing items in person before buying, especially products with a higher price point, means that physical shopping remains indispensable, according to Lee. Rapid urbanization in China also carved out limited leisure activities for city dwellers, hence "a weekly trip to the shopping mall" is inevitable, he added.

That's why the entrepreneur is sticking with his aggressive expansion of increasing the retail area managed by the group to 3 million square feet by 2016.

"We're not changing course despite an economic slowdown. In fact, we're on the way to our target with over 2 million square feet now. To adapt, we've incorporated cinemas and restaurants into our shopping malls or venture into supermarkets in smaller cities. These offerings cannot be replicated by shopping websites," he said.

Read More'Stay away' from the Chinese stock market: Trader

Keen on China listing?

But while Lee isn't too worried about the stock market's impact on consumers, he's not entirely keen to list his own company there.

"We don't go with the hype and opt for a listing at wherever that's hot," Lee said. "Some firms go public to raise cash, but we have sufficient liquidity so a flotation for us is about raising our profile and brand position," Lee said. However, with his business based on the mainland, he doesn't want to entirely eliminate the option.

The company listed on the junior board established by the Singapore Exchange (SGX), Catalist, in 2011 and transferred its listing to the SGX's mainboard two years later. It has a market capitalization of 361.97 million Singapore dollars ($264.17 million), compared to Hong Kong-listed rivals Century Ginwa Retail Holdings and Wing On Co. which have market values of $205.42 million and $1.02 billion, respectively.

Shares of Zhongmin Baihui Retail Group last changed hands between 1.8350 and 1.8400 Singapore dollars on Monday.