The UK supermarket’s joint venture with the state-run China Resources Enterprise (CRE) will combine Tesco’s 131 outlets in the country with CRE’s almost 3,000 stores, called Vanguard. CRE will own 80 percent of the new chain, with Tesco holding the remaining 20 percent stake.
"The partnership creates a strong platform in one of the world's largest markets," Tesco chief executive Philip Clarke said in a statement. "We can now combine our strengths to build a profitable multichannel business, offering our customers in China the best of modern retail."
China has regularly been pinpointed in recent years as the world’s biggest market for food and groceries, with research group IGD estimating it to possess an annual value of more than one trillion dollars. On top of this the market is forecast to grow further still be approximately 50 percent over the next three years.
Tesco has been operating in China since 2004. The firm has also been eyeing the Indian market - which is forecast to witness similar rapid growth in the coming years. Earlier this year, it announced a joint venture with Trent Limited, part of India's Tata Group, which operates the Star Bazaar retail business in India. Tesco said it would invest around £85m in this particular joint venture.