Yonghui Superstores announced that it has reached an agreement with Chinese tech giant Tencent over the stake transfer of its subsidiary company Yonghui Yunchang, reports the Beijing News.
Tencent has reportedly agreed to increase investment in order to gain a 15-percent stake in Yonghui Yunchang, which has been promoting its new grocery business, Super Species.
Super Species is a new kind of supermarket brand that features fresh commodities and produce from around the world, delivery services and the combination of shopping and dining.
The supermarket brand targets middle class consumers who can choose fresh groceries, such as salmon or prime beef, or dine directly at the store. By logging into an app, customers can also purchase items and have them delivered to their homes.
Since the beginning of 2017, over a dozen Super Species stores have been opened around China by Yonghui Superstores. This has directly challenged the supermarkets of Hema Xiansheng, a rival of Super Species. Hema Xiansheng is backed by China's Alibaba Group.
It's been reported that Tencent has already become the biggest shareholder of JD.com, one of the biggest competitors of Alibaba's T-mall over online shopping. JD.com is reportedly the fourth largest shareholder of Yonghui Superstores.
Industry insiders say that the move by Tencent will increase the competition in China's grocery market, with Tencent joining hands with JD.com to compete with Alibaba.