Suning to buy Carrefour China business
Suning is to buy an 80 per cent controlling stake in Carrefour China for €620 million (RMB 4.8 billion).
The first Carrefour China supermarket was opened in 1995 when the French company was one of the first foreign retailers to enter the market. Currently it operates 234 outlets – 210 large-format hypermarkets and 24 convenience stores. Net sales for its last full year were €3.6 billion (RMB 28.5 billion) and pre-tax profit €66 million (RMB 516 million).
Just last month, Carrefour executives denied the business was for sale, but financial media have been reporting what turned out to be markedly accurate reports of negotiations this year.
Suning’s purchase follows the acquisition of 37 Wanda department stores earlier this year, which will be converted to Suning.com branding.
The company says it will use its smart-retail expertise to digitalise Carrefour China’s existing store network to create a “leading innovative supermarket shopping experience”.
“In the future, we expect to open up the access for Suning’s various business models, such as household-electronics sales, Redbaby, JIWU, Suning Financial Services, SuFresh and Suning Xiaodian’s immediate delivery, [and] to get into Carrefour China’s stores located in the central business and living areas of Chinese first- and second-tier cities,” said Tian Rui, VP of Suning.com.
“It will help us better meet more consumers’ needs due to strengthened core capabilities achieved by store innovation. With 400 million registered customers of the company’s retailing segment, Suning.com’s users-ecosystem will complement Carrefour China’s membership system, fully improving the customer value.”
He said that by connecting the more than 6000 Suning Xiaodian stores with Carrefour China’s outlets, Suning’s ‘last-kilometre home-delivery service will be able to serve more consumers with lower cost but higher efficiency.