LONDON (ShareCast) - (ShareCast News) - Carrefour is investing €2.8bn in digital developments and has agreed to form an alliance with Tencent Holdings that could see the Chinese tech firm buy a stake in the French retailer.
The potential acquisition of a stake in Carrefour China by Tencent and Yonghui, a retailer specialized in fresh food and small formats in China, in addition to a strategic partnership with Tencent, will pave the way for the French retailer in the Asian nation, most notably in food e-commerce.

Carrefour also announced that it would be cutting 2,400 jobs at its French business as a result of the overhaul, and was also taking steps to reduce the number of its storefront locations across its domestic network by selling 273 stores it bought from Spanish discount retailer Dia in 2014.

The firm said several stores "are experiencing great difficulties" because they have not adapted to their catchment area since their conversion to Carrefour store branding.

Using its partnerships with Tencent and Yongui to boost its struggling Chinese division, Carrefour has set a target for cost savings of €2bn by 2020 on the way to its goal of becoming a global leader in food e-commerce.

The group said it was aiming to receive roughly one-third of its sales from its own-branded products and increase organic food revenue by more than 300% to €5bn by 2022.

"We are currently grappling with a profound global movement," the company said in a statement.

"Our ways of consuming are changing: Quality, safety and where food comes from have become key concerns for our customers."

Carrefour had seen profits fall as much as two-thirds since 2007 as online shopping and speciality stores began to erode appliance sales at the same time a sales war kicked off amongst French grocers.

Rival Casino in November signed an agreement with the UK's Ocado to ramp up its online grocery business.

The CAC-40 constituent said the cuts would come in the former of voluntary departures as it planned to streamline its online offerings in France with a single digital platform for all shopping, and would also be opening 2,000 new convenience stores over the next five years in major cities.

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