Suning Xiaodian, the convenience store chain owned by Chinese retail giant Suning, has announced it is buying more than 60 Circle K outlets in Guangzhou province from Hong Kong’s Fung Retailing to further consolidate its position in South China.

Fung Retailing will sell all its shares in subsidiary Liya South China Convenience Store to Suning Xiaodian, The Paper reported, without disclosing the investment amount.

Suning Xiaodian is the Nanjing-based firm’s entry point to small-scale community shops. At present it has 6,000 outlets in over 70 cities, serving 35,000 communities and 120 million consumers.

Suning has been making moves to increase its grocery store presence in local residential communities. Last April it bought Dia China, a discount supermarket chain that had more than 2.5 million customers in Shanghai last year.

In June it acquired an 80% stake in Carrefour China for 4.8 billion yuan (US$687 million).

Speaking about the acquisition, Suning said that Liya South China Convenience Store, which operates mainland China’s Circle K Convenience Stores, has a rich supply chain, especially in terms of beverages and fresh food.

With a wide range of products covering many Hong Kong brands and overseas imported products, and being the first foreign convenience store chain to enter Guangzhou, Circle K has a comprehensive understanding of local consumer demands and preferences, and the fresh food products sold in its stores are designed and developed by internal teams.

Circle K was founded in the United States in 1951. Between 1985 and 2000, Fung Retailing, a retail business owned by Hong Kong-based company the Fung Group (formerly Li & Fung Group), obtained the Circle K Convenience Stores franchise in Hong Kong, Macau and Mainland China.

The first mainland China Circle K convenience outlet opened in Guangzhou in 2002 and there are now more than 60 stores across the province.