(Yicai Global) Feb. 21 -- A state-owned asset under a local government in Anqing in China’s eastern Anhui province is set to become an investor in Carrefour China, the unprofitable supermarket chain majority owned by retail giant Suning.Com.

The asset, based in the Yingjiang district of Anqing, will join forces with Carrefour China through an equity investment, a person with knowledge of the matter told Yicai Global. The pair have not disclosed the investment amount or shareholding ratio.

The two are expected to collaborate on supply chain management, capital, commercial operations, the industrial internet business, digital economy innovations, and benchmark projects of the ‘first-store economy.’

The Yingjiang government is optimistic about the prospects for the high-quality development of the smart retail business and believes the investment will help Carrefour China to transform and upgrade, another insider from the local government said.

Expectations for a recovery in consumption are improving, and the offline retail sector is reviving after the pandemic, according to market insiders. Carrefour China’s introduction of a state-owned asset as a strategic investor will relieve some of the pressure it experienced in recent years, boost market confidence in the retailer, and accelerate its transformation, they added. 

Carrefour China had a net loss of CNY795 million (USD116 million) in 2020 and about CNY3.3 billion (USD487 million) the year after. It also logged a net loss of CNY471 million in the first half of 2022 and fell behind rivals such as membership-only retailers Sam’s Club and Costco.

Product shortages and restrictions on gift card use in some of Carrefour China’s stores resulted from recent supply chain issues, the company has said in response to rumors that it was about to go bankrupt.

Editors: Zhang Yushuo, Martin Kadiev