Alibaba Group has expanded its supermarket footprint in China with a $3.6 billion investment in Sun Art Retail Group, raising its stake to 72%. The move sees Alibaba further driving its "new retail" strategy, which aims to transform the sector by marrying online and offline experiences.
The Chinese e-commerce giant first invested in Sun Art in November 2017, partnering Auchan Retail and Ruentex Group to digitalise and roll out new retail applications across Sun Art stores. These efforts included omnichannel integration and personalised customer service, Alibaba said in a statement Monday.
In its latest investment, it would acquire 70.94% of equity interest in A-RT Retail, which held 51% stake in Sun Art, and Auchan Retail for an estimated HK$28 billion ($3.6 billion), pushing its stake in Sun Art to 72%.
Alibaba Chairman and CEO Daniel Zhang said: "The alliance we formed with Auchan Retail and Ruentex was instrumental in building a robust infrastructure to create opportunities and value in China's retail sector.
"Sun Art has achieved impressive results in its digitalisation and pursued promising synergies with businesses across the Alibaba digital economy," Zhang said. "As the COVID-19 pandemic is accelerating the digitalisation[1] of consumer lifestyles and enterprise operations, this commitment to Sun Art serves to strengthen our new retail vision[2] and serve more consumers with a fully integrated experience."
Sun Art's physical stores in China currently are integrated with Alibaba's Taoxianda and Tmall Supermarket platforms, which offer one-hour and half-day delivery services through Alibaba's other subsidiaries including food delivery service Ele.me and logistics services operator, Cainiao Network[3]. As of June 30, Sun Art operates 481 hypermarkets and three mid-size supermarkets in China.
Alibaba on Monday also reportedly secured the approval of China Securities Regulatory Commission to move ahead with the initial