Alibaba invests $2.9 billion in China’s Sun Art Retail Group

Major stake in China’s top hypermart

alibaba invests 2.9b sun art retail group

The Chinese e-commerce giant Alibaba invests $2.9 billion for a major stake in Chinese top hypermarket operator Sun Art Retail Group

The firm announced on Monday that it has invested $2.88 billion (HK$22.4 billion) in the offline retailer.

Alibaba now becomes the second largest shareholder in the company by acquiring 36.16 percent shares after the French retailer Auchan Retail, which leads by 36.18 percent. However, the Taiwan-based company Ruentex that sold its shares to Alibaba will retain a 4.67 percent stake in Sun Art. Together the three partners pledge to introduce “a new shopping experience to China’s 1.3 billion consumers.”

Sun Art Retail Group is a leading hypermarket operator in China with 446 hypermarkets scattered across 224 cities.

This offer pushes Alibaba deeper into the offline retail business. The company has been taking interest in offline for a long time now and holds stakes in several offline retail companies. In 2014, Alibaba paid $692 million to buy a 35 percent stake in retail operator InTime and took up 20 percent shares of retail giant Sunning for $4.6 billion in 2015.

Earlier this year, Alibaba bought the remaining of InTime and took the company private, while it also invested in Lianhua Supermarket Holdings in May.

The purpose of these investments is to develop a bridge between offline and online commerce. The Chinese internet giant believes that the massive amount of data picked through its e-commerce services can be used to enhance the customer experience in-store while also optimizing fulfillment and stock management.

“Physical stores serve an indispensable role during the consumer journey, and should be enhanced through data-driven technology and personalized services in the digital economy,” stated Alibaba CEO Daniel Zhang.

“By fully integrating online and physical channels together with our partners,
we look forward to delivering an original and delightful shopping experience to Chinese consumers,” he added.

Zhang’s idea has already been played out as Alibaba owns a hybrid store called Hema, which offers customers to purchase items using unmanned payment checkouts or just order them for delivery. New ideas for Sun Art, Sunning and InTime are also developed in Hema, which serves as an incubation lab too.

This year Amazon acquired Whole Foods for $13.7 billion and the deal is being compared to Alibaba’s latest deal.

Also Read: Alibaba hits a record $25 billion in Singles Day sales

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