Dec. 13 (NBD) -- Chinese tech behemoth Tencent is set to go head-to-head with its great rival Alibaba in the retail sector. 

Tencent plans to by a 5 percent stake in Yonghui Superstores Co., Ltd, the supermarket chain operator announced on Tuesday.

The deal will be made through Tencent affiliate Linzhi Tencent Technology.

Meanwhile, Linzhi Tencent intends to increase its stake in Yonghui Superstores' subsidiary Yonghui Yunchuang Technology Co., Ltd., parent company of Yonghui's new retail format Super Species. 

The new moves mark Tencent's first push into the supermarket field.  

A source close to Yonghui Superstores revealed that China's leading online retailer JD brought Tencent into the contract with the supermarket operator, according to a report by The Beijing News. 

In 2015, JD reached a strategic partnership with Yonghui Superstores to purchase a 10 percent stake in the latter for a total of 4.31 billion yuan (649.9 million U.S. dollars).

In May 2017, JD's new ownership structure was made public, showing that Tencent is its biggest shareholder. 

Gu Guojian, director of the Shanghai Chainstore Research Institute, noted that Tencent's partnership with Yonghui is an answer to Alibaba's big investment in or acquisition of offline retailers including RT-Mart. 

In his view, such adjustment is positive and rational and is based on market rules. 

Tencent has been reaching out to new retail projects since the second half of this year. According to industry insiders, the tech giant has intentions to make JD an important part of its new retail program, but their cooperation is mostly in the financial sector, rather than the supply chain. This makes it a great option for Tencent to invest in Yonghui Superstores' smaller-sized supermarket brand Super Species. 

The investment ups the ante in Tencent's battle with Alibaba's Hema Xiansheng supermarket and improve its offline arrangements, industry insiders say. 

Cao Lei, director of the China e-Business Research Center, explained to NBD that Alibaba has embraced various retail formats, including department stores, supermarkets, fresh food stores, and convenience stores, and to fight against the company, Tencent is in dire need of a mature retail system with a nationwide coverage. 

Partnering with Yonghui Superstores can help Tencent quickly break into the fresh food retail market and narrow the gap with Alibaba in the new retail area, he added.  

In terms of operations, Tencent-backed Super Species is more like a combination of supermarket and catering services and mainly conducts business offline, and its business model is more ideal for new retail.

With Tencent's investment, Super Species will get more resources and will be able to enhance its online operational abilities. Beyond that, it will serve as a test field for Tencent's new retail solutions, Cao further pointed out. 

In the eyes of Bai Ya, CEO of mobile retailer Youzan, the retail market is big enough to house both Tencent and Alibaba, which makes it possible for the two giants to achieve win-win in the niche segment. 

Tencent declined to comment Tuesday when reached by NBD. Yonghui Superstores also refused the interview request on the ground that its stock trading is suspending and uncertainty remains.  

Email: lansuying@nbd.com.cn