Carrefour has unveiled a potential investment by Tencent and Yonghui in Carrefour China as well as a strategic cooperation agreement with Tencent in China.
Both announcements were made by Alexandre Bompard, Chairman and CEO of the Carrefour Group, during the “Carrefour 2022” strategic plan launch.
All these investments and alliances are framed into the actions plan to create a simplified and open organisation, one of the four pillars grounding the new “Carrefour 2022” strategy aimed to dinamise growth and push the company again into a leading position among new retailers worldwide.
Slowing sales momentum in 2017 and expected operating income down about 15% explain the launch of the new strategical plan 2020.
The French multinational posted +1.6% LFL in the full year vs +3.0% in 2016 and recurring operating income is expected at around €2.00Bn in the full year (non-audited estimate), down about -15% at current exchange rates.
On 8th November 2017 Carrefour held the 4th position among modern retailers in the grocery segment in China with a 3.3% market share just below Wal-Mart (5.1%) and Yonghui(3.2%).
Carrefour warns that the strategic cooperation and investment are still subject to further diligence and agreement of the parties on the terms of a definitive documentation.
Term sheet signed with Tencent and Yonghui
Carrefour has signed a term sheet with Tencent and Yonghui regarding a potential investment in Carrefour China.
The potential investment will leverage Carrefour’s global retail knowledge with Tencent’s technological excellence and Yonghui’s operational knowhow and in particular its deep knowledge of fresh products.
Upon completion of this investment, Carrefour will still remain the largest shareholder of Carrefour China.
The strategic cooperation and investment are subject to further diligence and agreement of the parties on the terms of a definitive documentation. Carrefour will keep the market informed of further progress as appropriate.
Cooperation agreement with Tencent
Besides, Carrefour and Tencent have signed a preliminary agreement regarding a strategic business cooperation in China, in order to bring together Carrefour’s longstanding retail knowledge and Tencent’s digital expertise and innovation capabilities.
Thanks to this partnership, Carrefour will improve its online visibility, increase the traffic of its offline and online retail activities and benefit from Tencent’s advanced digital and technological expertise to develop new smart retail initiatives.
Tencent will further develop the retail services offered on its social platforms and promote the use of Weixin as well as Weixin Pay, cloud computing and other services within the Carrefour ecosystem.
The contemplated scope of cooperation includes key partnership areas such as cooperation on data, smart retail, mobile payment, in-store experience and data analysis to boost Carrefour China’s customer traffic.
Data, e-commerce, smart retail and mobile, key points to succeed in China
Alexandre Bompard (Chairman and CEO of the Carrefour Group)said on all these movements in China: “Tencent is a fantastic technology leader, Chinese leader in social networks, media, online payment, digital leader as well; they are well known for WeChat, the leading social network in China, with nearly 1 billion users per month. This partnership shows Tencent’s trust in Carrefour Chine’s assets.
Tencent will allow us to play a major role in China, in the e-commerce food sector, we will better use our data, we will better tailor our offering, we will increase traffic to our applications, and we will also organise a transition toward mobile use. Thanks to WeBank, we will also develop an online system and an innovative credit system as well.
Together we will be working on the store of the future as well. beyond this agreement, I am very happy to announce that we have decided to join the capital of Tencent and Yonghui. Yonghui is a reference retailer in China, on fresh produce and convenience stores. Thanks to this agreement, we will benefit from Tencent’s experience on the digital market and on Yonghui’s know-how on fresh produce and convenience stores.
These two agreements are truly promising for Carrefour in China. I think this will allow us to lead to a highly innovative model, both offline and online.
Image over the headline.- Carrefour
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