Tesco has entered into a joint venture with state-run China Resources Enterprise (CRE), to create the biggest food retailer within China.
This joint venture will see the combination of 131 Tesco stores in the country, with 3000 CRE stores, called Vanguard.
IGD, the research group, issued figures ranking China as the biggest market for groceries and food globally. It has an estimated annual value in excess of one trillion dollars. The market is set to increase by 50% over the next three-year period.
Tesco, the UK’s biggest supermarket chain, has been active in the country since 2004 and been very keen to tap into the potential the country offers. The group has had its eye on the Indian market which is estimated to grow rapidly in the coming years.
Earlier this year Tesco announced a joint venture with Trent Limited, a part of the Indian Tata Group. Tata controls the Star Bazaar retail group in India. Tesco has stipulated that it is set to invest about £85m in this current joint venture. Once they have finalised the venture, the group will operate 12 stores selling a wide range of products, including home care products and groceries.
2 JUNE 2014, China
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