(Yicai Global) June 15 -- Yonghui Superstores, the fresh produce chain backed by Chinese tech giant Tencent Holdings, will invest close to CNY300 million (USD50 million) in two food producers as part of efforts to bolster its overall supply chain.
Yonghui will invest in Xiangcun High-tech Agriculture and Minwell Industrial, both located in its home province of Fujian, said the company, which operates 44 Super Species-brand fresh food stores across the country.
The investment will improve its fresh produce supply chain and create a stronger brand, the company said.
The deals are part of Yonghui’s efforts to consolidate its position in China’s increasingly competitive fresh supermarket sector. Demand for premium-quality fresh groceries is on the rise due to the country’s growing middle-class and China’s leading tech firms are set on driving the sector forward integrating online and offline channels.
Tencent took a 5 percent-stake in Yonghui Superstores earlier this year, which includes a 15 percent stake in Super Species fresh supermarket brand, while archrival Alibaba aims to open 2,000 of its own chain Hema nationwide within five years, up from 22 at present.
Yonghui will take a stake of close to 10 percent in Xiangcun High-tech Agriculture for CNY216 million. The latter firm mainly breeds black pigs and sells fresh pork products and has supplied to cities nationwide. Yonghui will also invest CNY67.2 million to take a near 20-percent stake in fish product producer Minwell Industrial, which sells sea bass and large yellow croaker from five stores in the province.
Editor: William Clegg