Tesco set to combine Chinese business with local retailer China Resources Enterprise, taking 20% stake in venture

Tesco set to combine Chinese business with local retailer China Resources Enterprise, taking 20% stake in venture

Tesco made its move to enter China in 2004, buying a stake in local hypermarket operator Hymall. After a challenging nine years, the UK retailer is in talks to merge its business there with local retailer China Resources Enterprise. just-food has dipped into its archive to bring you the highs and lows of Tesco's time in China so far.

July 2004

CHINA/UK: Tesco makes first move into China 
Tesco announces it has signed an agreement to acquire 50% of Chinese hypermarket chain Hymall, signalling the company's first move into China.

July 2005

Tesco JV to open 15 new stores in coming year 
Tesco's joint venture in China will reportedly open 15 new outlets in cities including Beijing over the course of the coming year, according to Sir Terry Leahy, the UK retailer's chief executive.

January 2006

Tesco reveals plans for its first store in Beijing. At this point, its venture with Hymall operated 39 outlets in China.

September 2006

Tesco says it will launch own-label products in China under the name Le Goe Tesco Value.

December 2006

Tesco extends Chinese venture holding to 90%
Tesco pays partner, the Taiwanese retailer Ting Hsin, GBP180m (US$350m) to boost its share in Chinese venture Hymall from 50% to 90%. Leahy says: "We have seen exciting growth in China since announcing the joint venture two years ago and are looking forward to the partnership entering a new phase."

January 2007

The first store operating under the Tesco banner opens. The store, in Beijing, adds to a 46-store estate. Sets out plans to open ten stores a year under the Tesco name.

October 2009

Tesco reveals GBP500m warchest for China 
Leahy reveals Tesco plans to divert the bulk of its capital investment over the next 12 months to China. "At the moment, we're looking at GBP500m (US$796.4m) [of investment] over the next year in China." Tesco has 66 stores in China and is trialling its Express convenience store format.

November 2009

Tesco announces shopping mall venture 
The retailer reveals the first in a series of planned ventures that will build shopping malls in China.

January 2010

The first of a planned 23 shopping malls opens in Qingdao. The mall features over 30,000 sq m of selling space alongside a 10,000 sq m Tesco hypermarket.

November 2010

Tesco aims to quadruple China sales
Tesco reveals plans to quadruple its sales in China to GBP4bn over the next five years.

February 2011

Tesco to build three malls through JV 
Tesco signs a joint venture to build three more shopping malls in China as part of its growth plans in the country.

April 2011

Tesco books its full-year results, in which it says its like-for-like sales in China are up 5.5% but admits the retailer's local operations failed to break-even in the second half of the year. New Tesco CEO Philip Clarke, promoted from his role leading the retailer's business outside the UK, says Tesco would reduce its store opening target in the country. Clarke says it had been more difficult than expected to get prime locations and it has taken Tesco longer than expected to recieve government permission to open its Lifespace malls.

August 2011

Tesco raises GBP70m in funding for Chinese expansion
Tesco raises CNY725m (US$113m) to fund its expansion in China through the launch of an offshore Chinese Renminbi denominated bond issue in Hong Kong.

April 2012

Announcing its full-year results for 2011/12, Tesco reports a 4.1% increase in like-for-like sales in China. Tesco says it has taken "a more cautious stance" on China amid "persistently high inflation" and pressure on wage costs. "We have also decided to hold back on the pace of new hypermarket development this year – with plans to open 16 stores, instead of stepping up the pace of expansion as we had intended," the retailer says.

August 2012

Tesco to close four hypermarkets 
The retailer is to close four of its hypermarkets in China as it grapples with what it called the "challenging" economic environment in the country.

February 2013

Tesco plots online launch in China as part of an e-commerce push across its international operations.

April 2013

Tesco publishes its annual numbers for 2012/13, when like-for-like sales in China fell 1.1%. It says it has taken a "more measured approach" to China in the last year. "We still see an excess amount of new space being opened in the market – ahead of customer demand – and we have moderated our pace of development accordingly. We opened just 12 new stores this year and closed five underperforming stores as part of our increased focus on our three strongest regions. China remains a strategically important market for Tesco," the retailer says. "We will focus our efforts on establishing and then pursuing a profitable approach to growth."

May 2013

Reports emerge Tesco is looking for a partner in China. Tesco declines to comment.

June 2013

Sales in China fall 4.9% in the first quarter of Tesco's new financial year. Tesco says the whole sector had been affected by the bird flu outbreak and a food safety scare involving pork. "China is a business we said we are going to focus much more on profitable sustainable growth," Clarke says.

August 2013

Tesco confirms it is in talks to merge its Chinese operations with local retailer China Resources Enterprise.