Tencent to back Carrefour in challenge to Alibaba in retail

Bloomberg

Tencent Holdings Ltd. plans to invest in Carrefour SA’s China unit, following Alibaba Group Holding Ltd.’s footsteps to uproot traditional grocery and department stores with technology.
The social media giant, along with local retailer Yonghui Superstores, agreed to take a stake in Carrefour China, the companies said. They plan to work together on data, retail, mobile payments and data analysis.
Tencent’s investment could help revive the struggling French retailer’s business in China, while expanding WeChat mobile payments across the country. The deal is part of a wider push to connect conventional retail to internet-enabled services, as web companies seek to attract more customers and users. In 2017, Alibaba struck a similar alliance with Sun Art Retail Group Ltd. and Auchan Retail SA.
“The e-commerce penetration ratio in China is quite high, but the offline retail market is much larger and they want to capture that,” said Naoshi Nema, an analyst in Hong Kong, referring to the Tencent deal.
Tencent and Alibaba are betting that combining retail stores and e-commerce will help boost orders, amass purchasing data and also let storefronts double as last-mile delivery centres.
Alibaba has already pumped millions into the $4 trillion sector by taking stakes in Intime Retail Group Co., Lianhua and Sanjiang. It’s also built its own chain of fresh food grocery stores called HeMa, the first of an envisioned nationwide chain that’s a grocery, restaurant and fulfillment centre rolled into one.
As mobile-based wallets and payments become more ubiquitous in China, such services have become a key battleground for China’s two internet juggernauts. Both are scouring prized assets across China to forge partnerships to promote their services and drum up growth now that their core businesses have matured.
Tencent and Yonghui have signed a term sheet for a potential stake in Carrefour’s China business, the French company said. While the size of any planned investment wasn’t disclosed, a deal would mark the social media and gaming giant’s latest investment in physical retail following its decision to take a slice of Yonghui for about $638 million.
Still, Tencent has some catching up to do. Carrefour operates more than 200 hypermarkets in China but its business is shrinking as consumers go online.

Carrefour cuts 2,400 jobs, invests $3.4bn in e-comm
Bloomberg

Carrefour SA is forming a partnership with Chinese tech giant Tencent Holdings Ltd. and investing $3.4 billion over five years in online shopping as Chief Executive Officer Alexandre Bompard seeks to fend off Amazon.com Inc.
A sweeping overhaul announced on Tuesday will result in 2,400 job cuts at its French headquarters, the Boulogne-Billancourt, France-based retailer said. Carrefour plans to sell 273 former Dia stores and reduce the size of its sprawling French hypermarkets. The retailer also said it aims to get one third of its sales from own-branded products and more than triple its revenue from organic food to 5 billion euros by 2022.
“We are currently grappling with a profound global movement,” the company said. “Our ways of consuming are changing: Quality, safety and where food comes from have become key concerns for our customers.” The job cuts will come from voluntary departures, Carrefour said. The company plans to streamline its online offerings in France with a single digital platform for generalist shopping, and will open 2,000 convenience stores in the next five years.