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Oct. 18 (NBD) – Suning.com (002024.SZ)'s "new retail" unit Suning Convenience Store will be completely taken over by the retail giant's affiliate Suning Smart Life, Suning.com said in a statement on Monday. The unit will then get a capital injection of 300 million U.S. dollars following a series of transactions between the listed company and its wholly-owned subsidiary and related parties. 

When the equity transfer is closed, Suning.com will hold 35 percent of Suning Convenience Store's shares through Suning International. Zhang Kangyang, son of Suning.com's founder and controlling shareholder Zhang Jindong, will hold the remaining 65 percent through wholly-owned subsidiaries Great Matrix and Great Momentum. 

The new investment, according to an industry insider, will not only alleviate Suning Convenience Store's financial pressure brought by the rapid expansion, but also grant the business more elbowroom when faced with market anomalies.

The convenience store business is Suning.com's major attempt in the "new retail" competition. In January, Suning Convenience Store pledged to open 1,500 new stores this year, but necessary investment entailed has stressed the company financially. According to the statement, from January to July this year, the unit rolled in revenue of 143 million yuan (20.6 U.S. dollars), with a 296 million yuan (42.7 million U.S. dollars) loss. 

As an important business form that meets neighborhood demands, China's convenience store business has attracted more attention than ever in recent years. Traditional retail heavyweights, internet titans like Alibaba and startups all swarmed into this market, not to mention well-entrenched local brands, turning the sector into a fierce battlefield. 

Suning.com has deemed accelerating new store openings as a key strategy. 

Bao Junwei, CEO of Suning Convenience Store, repeatedly emphasized the importance of speed in the interview with NBD. According to Bao, only the rapid expansion and flexible and differentiated management can help Suning Convenience Store gain an edge in the competition with Japanese brands.

In the second half of 2018, Suning Convenience Store will accelerate its pace and open 30 new stores per day, with a goal of having 500 stores in tier-1 cities like Beijing and Shanghai, Bao added.

Email: limenglin@nbd.com.cn