Carrefour has opened its first-ever smart supermarket in Shanghai in partnership with Tencent, four months after the parent company of China’s ubiquitous WeChat app bought a stake in the French retailer. The Le Marche store in China’s commercial capital is the premiere outlet of a grocery chain set to compete with Alibaba’s Hema supermarkets in the smart phone-equipped battle to change the way that China buys food.
Opened on Sunday, the new store in Shanghai’s Changning district covers two floors totalling 4,000 square metres (43,056 square feet, about half the size of Carrefour’s regular outlets. Located at 18 Pusong North Road, the supermarket is connected to the Beixinjing station on metro line 2.
Carrefour introduced over 25,000 product types, mostly food, to the smart store and customers can pay for their instant noodles and organic tomatoes with their WeChat accounts by scanning a QR code and enabling payments with facial recognition technology. The supermarket also features on-screen entertainment, including reality TV show Produce 101, owned by Tencent’s video arm, according to local media reports.
The new outlet is reported to be Carrefour’s first global foray into “smart” retail.
Competition with Alibaba and JD Heats up
The smart store launch follows the announcement of a strategic business cooperation between the retailer and the tech giant in late January, through which Tencent purchased an unspecified stake in Carrefour’s China unit. The pair said they would cooperate on data, smart retail, mobile payment, in-store experience and data analysis to boost Carrefour IChina’s customer traffic.
Tencent’s tie-up with Carrefour is poised to compete with e-commerce behemoth Alibaba’s Hema high-tech supermarket chain, which already had a head start with 22 stores under operation by 2017 year-end. Alibaba said earlier this year that it would open 2000 Hema stores nationwide in the next three to five years.
In March, Alibaba signed a cooperation agreement with China’s top property developers including China Vanke, Evergrande and Country Garden to provide Hema with store locations and related service support. The Jack Ma-led tech company has set a target of opening 2,000 Hema stores nationwide in the next three to five years.
JD.com Cements Brick-and-Mortar Partnerships
Another tech titan venturing into brick-and-mortar stores is Alibaba’s biggest online retail rival, JD.com, which opened its first 7Fresh grocery store in Beijing this January. Two months later, JD signed an agreement with convenience store chain FamilyMart that will allow users of the e-commerce platform to get food delivered to their doors from any of FamilyMart’s core locations in Beijing, Shanghai, Shenzhen and Chengdu within a half-hour, 24 hours a day.
JD also bought a 10 percent stake in mainland supermarket chain Yonghui Superstores for RMB 4.3 billion ($700 million) in 2015.