French supermarket, Carrefour, has sold its China business to Chinese retailer Suning.com. In a $1.6 billion deal, the company sold 80% of its stake. The French company which entered China about 24 years ago currently has about 250 supermarkets and stores across China. It had struggled with declining sales in the last few years and had been trying to divest its stakes since 2017.

China has good internet penetration and its people generally seem to prefer e-commerce, which Carrefour couldn’t transform into. Hence, its sales declined progressively.

The sale however is a win for Suning.com because it already incorporates e-commerce. The company, which is part owned by Alibaba, operates almost 9000 shops in 700 Chinese cities and this sale would expand its business and competitiveness.

With its huge population of over 2 billion, China is an attractive destination for international retailers and supermarket companies. But many of them wouldn’t survive without an strong and efficient e-commerce component.

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