(Yicai Global) April 12 -- Suning Retail Cloud, a smart shopping chain with a focus on smaller cities run by retailing giant Suning.com, has completed A-round financing and plans to open an additional 4,200 nationwide outlets this year to reach 12,000.

The financing was led by Chinese asset managers CITIC Private Equity Funds Management and ADV Partners, Suning.com said today. No information was given about the amount raised.

The funds will be used to attract more shop operators and to further penetrate the rural market, the Nanjing-based company said. Suning Retail Cloud had 7,737 franchised stores as of the end of March, almost half of which were opened last year.

Suning Retail Cloud offers an asset-light retail strategy, in stark contrast to some of the major brick-and-mortar hypermarket chains that Suning runs in China such as Carrefour. Goods are sold from franchised shops which are able to leverage Suning.com’s huge branding, supply chain, financial services, logistics and e-retail networks.

The chain had turnover of CNY20 billion (USD3.1 billion) last year, according to Suning.com. Upgraded stores saw sales double on average last year. Profit is two to three times that of its competitors, it added.

The shift in strategy will be welcome news for investors in beleaguered Suning, which in February was the subject of a CNY14.8 billion (USD2.2 billion) bail out by two firms under the Shenzhen government.

The company has been loss making for seven consecutive years largely due to overaggressive expansion – the firm bought an 80 percent stake in Carrefour China in September 2019 – and the fallout from the Covid-19 pandemic which greatly reduced footfall to its brick-and-mortar outlets. 2020 losses are expected to widen by two-and-a-half times from 2019 to CNY3.9 billion (USD604.4 million), the company said in an earnings report on Feb. 26.

Editors: Tang Shihua, Kim Taylor