The venture would involve the combining of Tesco's 131 stores in China with CRE's almost 3,000 Vanguard stores to create what they say would be the leading multi-format retailer in China.
CRE, which would control 80 percent of the new chain, said that the venture would bring together its "deep understanding of local customers, established nationwide infrastructure and proven track record as a partner with Tesco's global retail expertise, international sourcing scale and supply chain capabilities.”
Tesco, the biggest supermarket chain in the UK, first started operating in China in 2004 where it has hypermarkets and some shopping malls containing Tesco stores. Analysts have reacted to news of the talks by pointing out that the joint venture would allow Tesco to reduce the amount of capital it must commit to its China business, while still having a presence there.
The current leader in Chinese hypermarkets is Sun Art, which is a joint venture between the Taiwan conglomerate Ruentex Group and the French retailer Groupe Auchan.
