Sinopec and Tencent consider collaboration

PUBLISHED : Tuesday, 12 August, 2014, 4:14pm
UPDATED : Thursday, 14 June, 2018, 4:53pm

Fu Chengyu, the chairman of China Petrochemical – parent of listed China Petroleum & Chemical (Sinopec) – has met internet giant Tencent Holdings president Martin Lau Chi-ping to discuss potential co-operation between the two firms.

The meeting took place at China Petrochemical’s headquarters in Beijing, said a statement posted on the company’s website last Friday.

Sinopec is in the process of selecting potential strategic and financial investors to buy up to 30 per cent of its fuel distribution unit, Sinopec Sales, which may be separately listed in a stock market in the future.

Spokespeople at Sinopec and Tencent declined to comment on reports suggesting Tencent was one of more than 20 potential investors in Sinopec Sales.

An analyst said the potential co-operation might be in payment – the topping up of fuel and convenience stores payment cards and virtual payment cards, or online adverting.

“Other areas include the cross-selling of car financing and insurance services between the two companies,” he said.

Ricky Lai, a research analyst at Guotai Junan International, said both Tencent and rival Alibaba were focused on exploiting the synergies that an interest in Sinopec’s retail operations could provide.

“For example, Tencent’s social communications service WeChat can provide users with a convenient mobile payment platform when they buy fuel from Sinopec’s petrol stations,” Lai said.

Other areas include the cross-selling of car financing and insurance services between the two companies

Sinopec runs a national fuel station network with 30,500 stations and 23,431 convenience stores trading under the Easy Joy brand.

Last week, Sinopec signed a preliminary agreement with Taiwanese retailing major Ruentex Group, which runs a network of hypermarkets and convenience stores on the mainland.

The pact called for joint merchandise procurement and joint operation of convenience stores at Sinopec’s petrol stations in Shanghai as a pilot.

Sinopec also sealed a strategic co-operation agreement with Tibet Highland Natural Water for Sinopec’s convenience stores to sell the latter’s bottled water products as part of the oil and gas major’s effort to expand its non-fuel businesses.