Tencent Holdings, China's largest internet company, has jointly invested with supermarket operator, Yonghui Superstores in Carrefour's struggling Chinese operations, as part of a broader partnership to boost the business through the use of data analysis and mobile payments.
“The potential investment will leverage Carrefour's global retail knowledge with Tencent's technological excellence and digital expertise, and Yonghui's operational know-how and in particular its deep knowledge of fresh products,” added Carrefour in a statement.
Carrefour will however remain the largest shareholder of the China unit.
Tencent, in a statement, said “It looks forward to cooperating with Carrefour in further enriching the retail and services experience for our users” in areas such as mobile payments and cloud services.
China's internet giants have been trying to find new growth engines by either partnering with established offline retailers or rolling out their own bricks-and-mortar chains, including ‘unstaffed’ stores.
Tencent's foray into retail follows an expansion by Alibaba Group Holding and JD.com into physical shopping in what is dubbed "New Retail", in which online functions such as payments, delivery and logisticsmanagement are integrated with shopping at the high-street store. “What Carrefour also wants from the partnership might be the online resources e-commerce giant JD.com has, as Tencent is the biggest shareholder of JD.com,” said Luo Xianfei, an analyst.
There is a fierce retail war going on in China and most retail giants in China have either chosen the sides of Alibaba or Tencent. For Carrefour, the partnerships are the latest steps in its attempts to stem declining sales in China, where it operates hypermarkets and convenience stores. Sales fell 5.4% in the 4th quarter 2017 amidst increasing competition from domestic chains.