HONG KONG/DUESSELDORF (Reuters) – Chinese E-commerce giant Alibaba Group Holding Ltd is in talks with Germany’s Metro about taking a stake in the German retailer’s China operations, three sources told Reuters on Thursday.

Metro and Alibaba declined to comment.

The talks are at an early stage and could still fall apart, the sources said.

Alibaba’s interest comes as rival Tencent last year signed a partnership deal with France’s Carrefour.

Metro has 95 stores in China and real estate assets in major centers, such as Beijing and Shanghai, one of the sources said.

Metro Chief Executive Olaf Koch has said the German firm was reviewing potential partnerships with local players in China.

Metro and Alibaba have already partnered in online retail in China. “We are growing continually and we are profitable there,” Koch said on Tuesday when Metro presented first quarter earnings.

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