Alibaba expands offline retail presence with $2.9B investment in leading grocer Sun Art

Through an alliance comprising Alibaba Group Holding Ltd, Auchan Retail S.A. and Ruentex Group, the e-commerce giant will invest approximately $2.9 billion in China’s hypermarket major Sun Art Retail Group Ltd.

Alibaba will purchase its stake from Reuntex, while Auchan will increase its own stake. The end result will see Alibaba with 36.16%, Auchan with 36.18% and Ruentex with 4.67% stakes in Sun Art.

Jack Ma’s group has already invested nearly $10 billion in the brick and mortar retail space, and one of its key motivations is the fact that the e-commerce market in urban China is slowly approaching saturation.

Data from Kantar Worldpanel shows that Sun Art currently holds an 8.2% market share in the grocery segment. Food retail in China is a $500 billion industry, and the Chinese technology and online retail major clearly wants to move in on it sooner rather than later.

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