Chinese e-commerce giant Alibaba said it intends to increase its stake in Sun Art, a large chain of supermarkets in China.
Chinese e-commerce behemoth Alibaba announced earlier this week that it plans to boost its stake in Sun Art Retail Group. Particularly, Alibaba looks into shelling out $3.6 billion to own a controlling stake at one of the largest supermarket chain operators in China.
Alibaba said that it plans to increase its stake in Sun Art to about 72 percent. To do this, the Chinese tech titan will have to purchase over 70 percent of the equity in A-RT Retail Holdings from French firm Auchan Retail International. Afterward, it plans to buy out the rest of the hypermart chain Sun Art, which already has over hundreds of stores in China.
Alibaba will invest about $3.6 billion in Chinese hypermarket operator Sun Art, raising its stake to 72% and deepening its grocery sector expansion https://t.co/jqkWvuI6Ro $BABA pic.twitter.com/Cni8Hn885a
— Bloomberg (@business) October 19, 2020
Meanwhile, Nikkei Asia reports that shares for Sun Art rose to 19.1 percent in Hong Kong trading on October 19. On the other hand, Alibaba climbed by 1.1 percent.
The e-commerce giant had previously spent $2.8 billion when it invested in Sun Art for the first time in 2017. It marked the beginning of the company towards its “New Retail” approach. Particularly, Alibaba intends “New Retail” to be a bridge to online and offline commerce, TechCrunch reported. For instance, customers can pick up their online orders from brick-and-mortar stores.
Since then, Alibaba managed to integrate its physical stores into its e-commerce platform.
Shifting to Online
The “New Retail” strategy had more than paid off with the pandemic. More people preferred to do most transactions online than ever before, like shopping or groceries, especially when governments imposed restrictions. But that attitude continued even after lifting of lockdowns.
Alibaba CEO and chairman Daniel Zhang said that the pandemic has accelerated “the digitization of consumer lifestyles and enterprise operations.”
“This commitment to Sun Art serves to strengthen our New Retail vision and serve more consumers with a fully integrated experience,” Zhang added.