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Carrefour and Tencent Ali's love to kill

Technology 2018-01-24 15:02:00 3

Abstract: Before the negotiation with Tencent, Carrefour's target of negotiation was Alibaba. However, Ali eventually selected RT-Mart, which is a great shake for Carrefour and Tencent, so it took only two months, the two sides reached a cooperation, and Yonghui Tencent as an important member of the retail camp, but also a matter of course joined.

The author of the article Yu Yue, Fang Gongyi Liu, Ma Xuemei, from the financial network, the original title "Carrefour and Tencent Ali's love to kill," authorized Wall Street News reproduced.

On January 23, the French supermarket giant Carrefour (CA.FR) announced that it has entered into an equity investment agreement with Tencent Holdings (0700.HK) and Yonghui Supermarket (601933.SH) and reached a strategic cooperation agreement with Tencent. Wing Fai also announced on the same day that "the three parties will work together for win-win cooperation and further cooperation in such areas as supply chain integration, technology application and business empowerment."

"Finance" reporter was informed that, before the negotiations with Tencent, Carrefour's target is Alibaba, and the program is not to invest in shares, but Carrefour China as a whole to sell Ali, but failed to reach an agreement. Ali subsequently selected RT-Mart, and Carrefour quickly started negotiations with Tencent and reached a deal within two months.

Carrefour did not disclose the transaction amount in the announcement, but Carrefour will remain Carrefour China's largest shareholder after the transaction is completed. Caijing magazine has learned exclusively that although the announcement said that the tripartite parties only reached the initial intention of investing, the core content has been agreed upon and the rest are procedural issues of compliance.

"This investment combines Carrefour's expertise in global retailing, Tencent's technology excellence and Wing Fai's rich operational experience, particularly in the fresh industry," Carrefour said in a statement.

Carrefour also said in a statement that Carrefour will increase its online exposure through strategic cooperation with Tencent, increase traffic to its online and offline retail businesses and take advantage of Tencent's advanced digital expertise to develop a new smart retail program. Tencent will further develop the retail services provided by its social platform within the Carrefour ecosystem and promote the use of WeChat and WeChat payment and cloud computing services.

Carrefour not only announced the cooperation with Tencent and Yonghui, but also announced a series of global reform and "downsizing" plans, including a layoff of 2,400 and the sale or closure of another supermarket brand owned by its subsidiary Di Asian day (Dia). In the wake of these plans, Carrefour stock rose sharply after opening on January 23, up to 19.68 euros, an increase of 6.55%.

Tencent's stock also rose 3.17% the day to close at 474.6 Hong Kong dollars. Tencent told Caijing reporter that there is no more information to be disclosed besides Carrefour's announcement.

In recent years, foreign supermarkets in China are generally poor operating conditions. Tesco in the United Kingdom and Lotte Mart in South Korea all quit China one after another, leaving foreign supermarkets looking for local partners. Such as Wal-Mart and Jingdong cooperation, Tesco (China Merchants is) shares.

Carrefour is one of the earliest foreign-funded supermarkets in China, and its momentum of development was good. An insider told Caijing reporter that the 2008 Beijing Olympic Games held the peak of Carrefour's performance in China. "We can not afford to use more money, and we can only make the stores look better and the paints go well."

However, after the entry into the second decade of 2010, rumors of Carrefour's intention to sell its business in China have also come down with the double-ended hits by local supermarkets and e-commerce companies. In 2017, some foreign media reported that Carrefour China intends to sell the rumors of the acquirer also includes Ali. However, Ali denied to Caijing that he had negotiated with Carrefour.

Carrefour's decline, first of all, with the increasingly fierce competition. Carrefour just entered China, similar to the very few supermarkets, a Carrefour store can attract consumers within a radius of five kilometers, but with the rise of local stores, often within a few kilometers there are several large supermarkets to choose from .

At the same time, the rise of e-commerce enables consumers to buy everything that can be bought in a supermarket without leaving their homes, further diverting customers. "There was only RT-Mart and Wal-Mart on our opponent's list five years ago, and we do not think Taobao is our competitor, but now we have to reprise their activities every month," said the insiders. "Reporter said.

In the traditional supermarket in trouble at the same time, the domestic Internet giant layout of offline retail business. Prior to this, Tencent has acquired Yonghui Supermarket, and Alibaba is also one after another into Sanjiang shopping, Lianhua Supermarket, Xinhua and Xin retail. The Tencent pulled Carrefour into their own camp, will undoubtedly make the two sides more fierce line of retail sales.

According to "Caijing" reporter understands, Ali prepared investment in offline retail, the potential investment target a lot, eventually delineated two objects, namely, RT-Mart and Carrefour. Carrefour offer higher, while RT is relatively cheap, and the terms of the acquisition is simple, so Ali finally chose RT in November last year.

The failure to negotiate with Ali has a big impact on Carrefour. At this point exactly Carrefour's new president took office, change strategy, from the sale of Carrefour China to sell part of the shares, the Chinese negotiating team had been replaced by people from foreigners. At the same time, Ali won the RT-Mart's news Tencent feel the pressure, so hit it off with Carrefour, progress in the negotiations went very smoothly. Wing Fai because it has become a member of Tencent camp, and thus a matter of course to join the cooperation.

The parties to this transaction have their own demands. From Carrefour's point of view, its ultimate choice Tencent and Wing Fai, is optimistic about each other and their complementarity. Carrefour line strong, weak online, offline to online weak technology, technology can be empowered Tencent. Carrefour's offline stores, supply chain partnerships, you can help Tencent achieve offline value. In addition, Tencent shares of Wing Fai supermarket in the fresh varieties and supply chain has the advantage, you can share with Carrefour resources.

From Tencent's point of view, Tian Feng Securities Deputy Director, Chief Commercial and Social Services Liu Zhangming believes that due to high logistics and distribution costs, FMCG's pure online model can not achieve large-scale profitability, so Tencent (Ali, too) Must be through the integration of offline supermarkets, FMCG permeability increase. He told Caijing reporter: "The integration of supermarket format is still underway. There will be more regional supermarkets leading into Ali and Tencent in the future."

From Yonghui's point of view, Liu Zhangming believes that Yonghui can get a share dividend by helping turn Carrefour into profit; at the business level, it can jointly form a large-scale joint procurement with Carrefour and reversely establish upstream producers and brand dealers Greater bargaining power, thereby enhancing their gross margin.

Judging from the past investment case, Tencent and Ali's strategic differences significantly. Tencent's investment layout shows a tendency of "decentralization", which accounts for 5% of the shares of Yonghui Supermarket and shares of 15% of Yonghui Yunchuang, a subsidiary of Yonghui Supermarket. It does not assume the business role of providing more Strategic assistance, such as Wing Fai super species access Tencent applet, improve the payment, enhance the delivery experience. This layout reflects the Tencent "connect everything" company positioning, combining WeChat traffic and tool attributes strengths. From the current announcement of the news, the strategic cooperation with Carrefour continues this strategy.

Instead, Ali's new retail layout reflects the "centralization" feature. Ali itself has a huge retail service system, from Taobao, Lynx, Alipay, to the rookie, Huaxin Da ("light box horse mode" service providers), Ali is trying to provide retailers with more Dimensions, verticalization of services and remodeling. Ali's investment in high-Xin is the identity of the two shareholders, and depth involved in business. Ali reserves the right to appoint the majority of members and chair, chief executive and chief financial officer of the RTD's board of directors.

Ali eventually selected RT, in addition to price factors, but also commercial considerations. Ranran Capital, Founding Partner and former United Express General Manager Poon Yuk Sing told Caijing that Alibaba did not need to acquire two hypermarkets at the same time, and that RTD is more attractive in both options.

Poon Yuk new view, Ali admitted to RT-Mart, Tencent left the option has been limited. "Wal-Mart is not going to sell any foreign supermarket on the market, Tesco has been sold to Vanguard and RT-Mart has sold Ali, leaving only Carrefour," he said. "The size of private-owned or state-owned enterprises is not as good as that of Carrefour, and it is still not the same size as Carrefour.

Liu Zhangming also believes that in terms of integration of new retail formats, there is a competing difference between Tencent and Ali. Ali itself to do electricity providers, but also has a national network, which can be acquired companies into the original product, supply chain system. Tencent do not have the advantages in this area, so the joint Yonghui offline supermarket format integration.

"Finance" reporter learned that the future Tencent will Yonghui sub-business more equity cooperation.