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Walmart teaming up with Tencent on digital, smart retail in China

Walmart Inc. and Chinese internet giant Tencent Holdings Ltd. on June 7 entered into a strategic cooperation for digital and smart retail in China.

Key focus areas will include customer experience, targeted marketing, payment services, memberships and communications through Tencent's Chinese social media platform WeChat.

The tie-up will see Tencent direct its social media traffic to Walmart China, the Chinese company said on its official WeChat account.

The companies will jointly develop more payment options, including added use of facial recognition, while also exploring ways to deepen market penetration through WeChat services such as mobile payments and mini-programs.

The membership system of Walmart's warehouse chain Sam's Club could also be integrated with Tencent's ecosystem.

Walmart previously partnered with Tencent's WeChat Pay in March, and a WeChat mini-program called Walmart Scan and Pay was rolled out at some Shenzhen-area stores of the retail giant. It allows customers to pay for a product by scanning a barcode on their cellphone.

The mini-program is now available at Walmart stores in 28 Chinese cities and is expected to expand to more than 400 stores across the country by year-end.

Walmart already has an ongoing strategic alliance in China with local e-commerce giant JD.com Inc., which counts Tencent as its biggest shareholder.

The collaboration adds to Tencent's activity in the physical retail space this year, which includes an investment in Chinese retailer Better Life Commercial Chain Share Co. Ltd. and the signing of a term sheet for a possible investment in French hypermarket operator Carrefour SA's China unit.