Having a controlling stake in Carrefour China will help Suning overcome its shortcomings, said the chairman of the Chinese retailer giant Suning.com in internal meetings on July 1 and 2.
On June 23, the Suning International Group Co, Ltd, a wholly-owned subsidiary of Suning.com, announced a payment of 4.8 billion yuan (US$699 million), which will be paid in cash, for an 80% stake in Carrefour China, which mainly operates hypermarkets.
The deal was intended to reinforce the “market competitiveness of fast-moving consumer goods” operations.
After closing the transaction, which is expected by the end of this year, the Suning International Group would take five of the seven seats on Carrefour China’s supervisory board, while the Carrefour Group would retain a 20% stake in Carrefour China with two seats on the board.
Zhang Jindong, chairman of the board in Suning.com Co, Ltd, said in the internal interim meeting that fast-moving consumer goods operations had been a key category of the group. Through the acquisition of Carrefour China, Suning would be able to achieve a breakthrough in the fast-moving category, which will help overcome the company’s shortcomings, the Paper reported.
The Nanjing-based retailer has planned to digitalize the existing Carrefour stores and integrate its online and offline shopping experience.
Specifically, various Suning businesses such as Suning Appliance, Suning Redbaby (maternal and child supplies stores), Suning Jiwu, Suning Finance, SuFresh (fresh food supermarkets) and Suning Xiaodian (providing neighborhood products and services) could be amplified in the retailer ecosystem given by Carrefour China.
Carrefour’s professional fast-moving consumer goods operations and supply chain capabilities would enhance Suning’s full-scenario retail model, Zhang added.