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Shanghai govt offers Merc to promote spending

By Cao Li (China Daily)
Updated: 2009-04-22 07:47

SHANGHAI: In an unprecedented development, a district government will subsidize shops during the May holiday sales, aiming to stimulate spending in times of a financial crunch.

The Xuhui district government is giving away three Mercedes-Benz C200K and 150 gold bars to shoppers at nine department stores in Xujiahui, the central business district (CBD) of Xuhui, from April 24 to May 10.

"It is a special act coming at a special time," said Wang Qiwei, an official with the government.

According to Huang Libo, deputy director of Xuhui Business Commission, the widening financial crisis has seriously affected Xujiahui. The sales volume dropped dramatically compared to that in the same period last year.

Besides, construction of a road and subway close to the shopping area has affected transportation, and new business circles developing around the extending subway lines are proving to be a loss for CBD storesowners.

To reboot the business, the district government is sponsoring the nine major shops in the CBD to hold a lucky draw.

Anyone who spends 200 yuan ($29) at any of the shops would be entitled to play the lottery. The top prize is a Mercedes-Benz C200K worth 320,000 yuan and the second a gold bar of 20 gm worth 4,000 yuan. All the prizes, totalling more than 2 million yuan, are sponsored by the government and will be given away on April 30, May 4 and May 11.

The promotion is supposed to generate more than 100 million yuan sales revenue and the customer flow is estimated to increase by 20 percent year-on-year.