Tesco, a UK-based retail major has concluded the joint venture agreement with the state-run China Resources Enterprise (CRE) to launch a multi-format retail business in China.

As per the terms of the deal, Tesco will merge its retail network of 131 outlets in the country with CRE’s 3,000 stores forming an integrated entity.

CRE will take up a majority holding of 80% in the new chain while Tesco will have a 20% stake.

Tesco CEO 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," added Clarke.

Tesco that forayed into Chinese retail market in 2004 is confident of the joint venture, consolidating its best-in-class retail practices, international sourcing and multichannel capabilities with CRE’s strong local knowledge and brand, to create a business which is the largest food retailer in China.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

CRE CEO Hong Jie said, "We are very excited about the completion of this agreement; it also marks a major milestone for our business development. 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."

Tesco, meanwhile, is intending to tap the Indian market, in line with a joint venture it announced early this year with Trent Limited, a unit of India’s Tata Group.

With plans to invest nearly £85m, the UK’s company is planning to operate 12 stores retailing a range of products including groceries and home care products following the formation of the joint venture business.