Carrefour Might Sell Off Chinese Business

Carrefour SA is considering selling off its Chinese business, and has even reportedly reached out to potential buyers.

Anonymous sources told Bloomberg that the French retail giant is looking to fetch about $1 billion for the Chinese business, but there is also the possibility it could choose to divest a stake or opt not to sell at all since no final decisions have been made.

A company spokeswoman said selling the Chinese business is “not on the agenda.”

Carrefour opened its first supermarket in Beijing in 1995, and now operates stores in more than 70 cities in the country. But net sales fell about 10 percent last year to 3.6 billion euros, according to the company’s annual report. This is despite Tencent Holdings and Yonghui Superstores taking a stake in Carrefour China last year, with the aim of working together on data, mobile payments and smart retail. But “alliances in China have slowed, rather than stopped the revenue decline,” Bloomberg Intelligence analyst Charles Allen said in an April report.

Carrefour is also facing competition from online rivals, namely Amazon. As a result, last year Carrefour revealed plans to reinvent the company’s brick-and-mortar hypermarket business and expand its eCommerce operations.

As the company seeks to bring its digital business up to speed, Carrefour Chief Executive Officer Alexandre Bompard announced plans to invest 2.8 billion euros ($3.4 billion USD) in eCommerce by 2022 — six times Carrefour’s current investment in its web operations

“Carrefour has reached a turning point in its history,” he said at the time. “We have a huge ambition and I am well aware of the magnitude of this challenge.”

The company is also turning to blockchain to strengthen its food excellence steps. Through IBM Food Trust, Carrefour will initially use the platform to highlight consumers’ confidence in a number of Carrefour-branded products. The solution is expected to expand to all Carrefour brands worldwide by 2022.