By ZHAO Xiaojuan

Chinese e-commerce giant JD.com is reportedly in discussions with Yonghui Superstores regarding a potential acquisition, despite JD.com's public insistence that it has no such intention.

Yonghui was founded by brothers, ZHANG Xuansong and ZHANG Xuanning and is the second-largest offline retail brand in China with 5.7 percent of the market. 

Analysts are skeptical about the acquisition. The supermarket business is in decline everywhere. Yonghui has been cutting stores for years and running at a loss. While Yonghui's situation has shown signs of improvement, expecting a profit of 390 million yuan (US$54 million) in H1, current liquid assets are insufficient to meet liabilities. 

JD.com has previously expressed interest in supermarkets and owns the Hua Guan chain. In 2018, an attempt to establish its own offline stores met with limited success.