Alibaba to invest $2.87bn in Chinese hypermarket chain Sun Art Retail

Retail acquisition news : E-commerce giant Alibaba Group will invest HK$22.4 billion ($2.87 billion) for an equity stake in Sun Art Retail Group, a Chinese hypermarket chain operator to expand itself in the offline retail industry.

Alibaba Group has entered into a strategic alliance with French food retailer Auchan Retail and Taiwanese conglomerate Ruentex Group in this regard. Their alliance aims to combine their online and offline expertise to develop in China which they call as the leader of phygital food retail.

Commenting on Alibaba investment in Sun Art Retail, Daniel Zhang who is the CEO of Alibaba Group, said: “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.

“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.”

Alibaba Group corporate campus in Xixi, Hangzhou, China. Photo courtesy of Alibaba Group Holding Limited.

The Chinese e-commerce company would acquire an aggregate direct and indirect stake of 36.16% in Sun Art Retail Group from Ruentex.

Auchan Retail would increase its stake in the hypermarket chain operator to 36.18% while Ruentex will hold on to a 4.67% stake in Sun Art Retail Group.

Wilhelm Hubner, the CEO of Auchan Retail, said: “This alliance with Alibaba stems from our shared vision for the future of commerce in China. Bringing together the leaders of in-store retail and of online retail will allow us to serve hundreds of millions of Chinese consumers a fully integrated, world-class shopping experience.”

With the transaction, Alibaba Group would replace Ruentex as the second largest stakeholder in the multi-format offline food retailer Sun Art Retail Group.

Sun Art Retail with 446 hypermarkets across 29 Chinese provinces and regions is among the top multi-format offline food retailers in the country. Its hypermarkets are operated under the “RT-Mart” and “Auchan” banners.

Sun Art Retail also operates unmanned stores under the Auchan Minute name.

The alliance between Alibaba, Auchan Retail and Ruentex Group will enable the operations of Sun Art Retail to benefit from the digital ecosystem of the e-commerce giant by combining resources of the three partners.

The alliance partners plan to digitize and roll out new retail solutions at Sun Art stores which would include online and offline integration along with modern fulfillment and personalized customer experience.

Peter Huang, the Vice Chairman of Ruentex Group, said: “In recent years, consumer’ demands have changed tremendously with the rapid growth of the mobile internet, and Sun Art is also endeavoring to move from offline to online.

“Ruentex is delighted to see the win-win collaboration between Sun Art and Alibaba with high synergies in online and offline that will meet the needs of consumers for a better life with better products and services and higher efficiency.”

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