Tesco increases foothold in Chinese food market

29th May 2014 07:08

Supermarket giant Tesco has signed a joint venture (JV) with state run China Resources Enterprise to create the biggest food retailer in China.The deal will combine Tesco's 131 Chinese outlets with CRE's almost 3,000 Vanguard stores, most of which are hypermarkets trading in nine provinces in China. Tesco will hold a 20% stake in the new chain created by the JV and CRE will own 80%.Tesco Chief Executive Philip Clarke said: "The partnership creates a strong platform in one of the world's largest markets. We can now combine our strengths to build a profitable multichannel business, offering our customers in China the best of modern retail."China is the world's largest food market and is forecast to grow by a massive 50% over the next three years.CRE Chief Executive Officer Hong Jie added: "We believe that this partnership is one that combines the strength of both parties and enables the JV to become the leading multi-format retailer in Greater China, through improved operations, better growth and enhanced profitability."CJ