Australians could be set for more international competition in the retail sector, with Aldi's arch rival Schwarz Group taking steps to set up Down Under.

Fairfax Media can reveal that the giant retail group let up by German billionaire Dieter Schwarz recently sought to trademark the word "Kaufland" in Australia.

Kaufland is a "hypermarket", or a one-stop-shop selling groceries and general merchandise such as bikes and car maintenance supplies. Known for its aggressive pricing, it sells brands and its own discount label.

The Australian trademark application was lodged in July and covers everything from alcohol to tobacco, pharmacy, musical instruments, sports equipment, garden, vehicles, financial services and insurance.