A PARTNERSHIP between French retailer Auchan and Internet giant Alibaba risks pushing Carrefour further behind in China and could persuade its new boss to sell out of the country.

Alexandre Bompard took the helm at Carrefour, the world’s second-largest retailer behind Walmart, in July and will unveil his turnaround plan Jan. 23 for the French company, which issued a profit warning in August.

Bompard has to decide whether to go or stay in China, where Carrefour has spent years trying to fix a business whose sales still fell 5.4 percent in the third quarter of the year amid fierce competition from local players and a buoyant online market.

Asked whether he had made a decision on China, the CEO said on the sidelines of an investment conference in Paris on Tuesday: “I will speak about it very soon.” Asked if this would be in the January presentation, he said: “Yes.”

“Until now, the only Western retailers to have successfully established themselves in China have done so via partnerships with local retailers, like Auchan with Sun Art Retail,” Bryan Garnier analysts said in a research note.

“A combination of offline and online is also an option, as seen with the recent agreements between Walmart and JD.com ... and Auchan and Alibaba. Failing the rapid conclusion of such a partnership, a decision could be taken at Carrefour to sell assets in China,” they added.

On Monday, Alibaba announced a HK$22.4 billion (US$2.9 billion) investment in a stake in Sun Art, China’s top hypermarket operator, in which Auchan also has the biggest stake.

Carrefour has been trying to reposition in China, where it makes 5 percent of group sales, having been too focused on large hypermarkets there. It has been expanding into e-commerce and convenience stores and opening logistics centers to cut costs.

Former CEO Georges Plassat repeatedly said Carrefour would stay in China and did not rule out a deal with a local partner, although nothing materialized.

Meanwhile, rivals have taken action. In 2013, Britain’s Tesco gave up on cracking the market alone, folding its unprofitable business into a State-owned company as a minority partner.

In 2016, Walmart sold its Chinese online grocery store in return for a stake in JD.com, China’s No. 2 e-commerce firm.

(SD-Agencies)