Chinese e-commerce giant Alibaba Group Holding Limited announced today it has spent HK$22.4 billion ($2.87 billion) with the acquisition of a 36.16% stake in China hypermarket operator Sun Art Retail Group.
The firm said that their online and offline expertise are exploring new opportunities in China’s food retail sector.
Sun Art Retail Group is China’s leading hypermarket operator that operates 446 hypermarkets across 224 cities in mainland China.
As part of an association with Auchan Retail and Ruentex Group, Alibaba would acquire shares from Ruentex while Auchan Retail would increase its stake in sun Art, the three companies said in a joint statement. The transaction will give Alibaba Group, Ruentex, and Auchan Reta approximately a 36.16%, 4.67%, and 36.18%, economic interest in Sun Art, respectively.
Alibaba will be known as the second largest shareholder with this deal which has a market cap of over US$10 billion. Alibaba is building big-data capabilities in the offline retail market and with the association, it would target opportunities in China’s $500 billion food retail sector.
Alibaba CEO Daniel Zhang said, “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.”
The alliance is focusing on these deals to offer a bridge between online and offline commerce for both users and retailers themselves. Alibaba believes that it can use its e-commerce’s and payment services’ data to improve the consumer experience in-store, and optimize fulfillment and stock management.