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Tencent Helps Tim Hortons Expand to 1,500 Outlets Across China

Jinshan Hong and Zheping Huang

(Bloomberg) -- Tencent Holdings Ltd. is backing a big expansion by coffee and doughnut chain Tim Hortons across China, making its latest investment in physical retail to shore up its WeChat mobile payments network.

China’s largest social media and gaming company is investing an unspecified amount in a Chinese outfit run jointly by Restaurant Brands International Inc. and the Cartesian Capital Group, the joint venture said in a statement. As part of the agreement, the internet giant will help the Canadian chain expand to some 1,500 outlets across the country from roughly 50 now, while digitizing operations and logistics.

Tencent and Alibaba Group Holding Ltd. are increasingly butting heads in brick-and-mortar retail, where they hope to overhaul outmoded operations through the use of data analysis and online payments. Enlisting nationwide merchants with high volumes has proven key to the competition between WeChat Pay and Alibaba-backed Alipay, which remains the leader in mobile transactions. Tencent signed a similar partnership agreement in 2018 with Luckin Coffee to explore new-fangled concepts from robotic delivery to payments using facial recognition, but the latter company has since been battered by an accounting probe. Alibaba has teamed up with Starbucks Corp. on delivery.

China may provide a boost for a brand that has struggled to expand internationally. Restaurant Brands -- which also owns the Burger King and Popeyes names -- set up the first Tim Hortons in Shanghai in 2019 and the financial hub remains a sliver of the brand’s global network of some 4,800 outlets.

Read more: Tencent and Alibaba Bring Their Battle for Supremacy to Coffee

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