(Yicai Global) Dec.12 -- Tencent Holdings Ltd. [HK:0700] will acquire a five percent stake in one of China's largest supermarket chain operators Yonghui Superstores Co. [SHA:601933], marking the internet leviathan's entry into the new retail sector following similar moves by counterpart Alibaba Group Holding Ltd. [NYSE:BABA].
The deal will give the firm a 15 percent stake in Yonghui unit Yonghui Yunchuang, which operates Super Species, a smaller-sized supermarket new retail brand, ' which competes with Alibaba Group Holding Ltd.'s Hema Fresh Food.
The two parties will engage in talks to iron out the details of the deal, which will involve share transfers and a final decision is expected by Dec. 18. Trading of Yonghui shares is suspended until then.
Tech players in China are increasingly looking to expand their businesses into brick and mortar stores that combine online and offline shopping experiences.
Yonghui's partnership with Tencent might change the competitive pattern in the supermarket industry. Yonghui's stock rose 10.01 percent to close at CNY9.78 per share before suspension on Friday.