Suning.com (the Company), the Fortune Global 500 retailer owned by Suning Holdings Group, one of the largest commercial enterprises in China, announced today it would buy an 80% equity stake in Carrefour China for €620 million (RMB 4.8 billion). After the transaction completes, Suning.com will become the controlling shareholder of Carrefour China.
Following after the strategic acquisition of the nationwide 37 stores of Chinese commercial real estate giant Wanda Group earlier this year, the transaction with Carrefour China will accelerate Suning.com's business expansion in all-categories merchandise retailing with reinforcing its market competitiveness of fast-moving consumer goods (FMCG) operations. And the further enriched bricks-and-mortar portfolios will also improve the shopping experience for local consumers.
As the leading omni-channel smart retailer in China, Suning.com has always been committed to building a full-scenarios retail ecosystem both online and offline and from cities to township, to create diversified shopping experiences visible and ready to serve consumers anytime and anywhere. The strong complementarity between Suning.com and Carrefour China's activities could make the Company effectively accumulate the quality resources of the comprehensive supermarket such as domestic store network and global supply chains, to boost Suning.com's specialized operation and new business exploration in consumer goods category.
Carrefour Group is one of the world's leading retailers. With a presence in China dating back to 1995, Carrefour China operates a network of 210 hypermarkets and 24 convenience stores, covering 51 large and medium-sized cities in Chinawith 30 million registered customers. In 2018, it generated net sales of €3.6 billion (RMB 28.5 billion) and EBITDA of €66 million (RMB 516 million), listed on the China's top 10 chain enterprises of FMCG (supermarket / convenience store) of the year.
In 2019, Suning.com's FMCG subsidiary has gained remarkable development in both supply chain establishment and shopping scenarios creation. In the just concluded 6/18 Shopping Festival, the order amount of FMCG category on Suning.com has increased 245%, which has been seen as an impressive progress. Furthermore, the acquisition of Carrefour China will integrate Carrefour's supermarket management experience and procurement capability with Suning.com's full-scenarios retailing model, multi-dimensional logistic delivery network and pioneering digitalized techniques, to advance Suning.com's 'online to offline' strategy in FMCG retailing and enhance the overall competiveness and profitability of the both parties.
With the Company's advantages of smart retail, Suning.com will promote the digitalization of Carrefour China's existed stores to create leading innovative supermarket shopping experience. Meanwhile, by connecting the more than 6,000 Suning Xiaodian with Carrefour China's outlets, Suning's 'Last-kilometer' home delivery is able to serve more consumers with lower cost but higher efficiency.
Tian Rui, Vice President of Suning.com said, "In the future, we expect to open up the access for Suning's various business models, such as household electronics selling, Redbaby, JIWU, Suning Financial Services, SuFresh and Suning Xiaodian's Immediate Delivery, to get into Carrefour China's stores located in the central business and living areas of Chinese 1st and 2nd tier cities. It will help us better meet more consumers' needs due to strengthened core capabilities achieved by retail store innovation. With 400 million registered customers of the Company's retailing segment, Suning.com's users-ecosystem will also be complemented with Carrefour China's membership system, fully improving the customer value."