Alibaba is set to invest at least $2.88 billion in shares to get a major stake from China’s top hypermarket operator Sun Art as the company tries to penetrate the offline retail market.
According to CNBC, Alibaba would buy the share from Ruentex while Auchan Retail would steadily increase its stake. The alliance with Auchan Retail and Ruentex Group would target the opportunities in China’s $500 billion food retail sector market.
The online giant is planning on getting at least 36% of Sun Art Retail Group which operates at least 400 hypermarkets.
“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” Daniel Zhang Alibaba Chief Executive Officer
Merging technology to the traditional retail market
The plans of Alibaba to transform itself by integrating technology to classic retail is innovative and aims to better manage inventory and even improve margins.
According to a joint statement, the company spoke of the need to closely coordinate with retail partners to provide a seamless online and offline customer experience to China’s 1.3 billion population, as well as a possibility to expand its networks and tapping into the food retail sector market as well.
According to Fortune, Alibaba’s most recent investment with Sun Art is its latest acquisition to date. It’s also seen that both Suning Commerce and Intime Retail Group are about to join the group.
Alibaba is considering making more moves to secure offline, overseas and rural buyers as China’s urban e-commerce market is slowly beginning to saturate.
Although the latest of Alibaba’s retail experiment is in its early stages, it can boost its success and may even be able to catch up with Amazon in a competition for both offline and online retail.
Although the winner of this battle is yet to be determined, Jack Ma was already considering on investing billions in grocers, malls, even before Amazon announced its takeover of Whole Foods.
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