(Adds details, analyst comment)
By Sophie Yu and Brenda Goh
BEIJING, Feb 26 (Reuters) - Tim Hortons China has completed a new fundraising round from Sequoia Capital China, Tencent Holdings 0700.HK and Eastern Bell Capital, and plans to add more than 200 shops to its network this year, the coffee chain operator said on Friday.
The Toronto-based firm, which competes with Starbucks Corp SBUX.O and Coca-Cola (NYSE:KO)'s KO.N Costa Coffee in China, did not disclose how much cash it had raised, but said the funds would be channeled into building more outlets as well as its digital infrastructure and brand.
It also plans to enter the coffee retail market this year, which could involve opening a store on Alibaba (NYSE:BABA) Group's 9988.HK Tmall online marketplace, the chain said.
Tim Hortons has opened more than 150 shops in ten cities since it entered China two years ago, calling them "profitable", but domestic proprietors have complained of tough price competition. food industry analyst Zhu Danpeng said the expansion plans suggested the chain was doing fine in a crowded market, but it had to improve its brand positioning.
"Tim Hortons currently has not much difference with other multi-international coffee chains like Starbucks and Costa," he said.
The coffee chain has sought to appeal to local tastebuds with drink options such as lemon peach oolong tea and hot sandwiches, alongside its usual offerings such as donuts.