Alibaba is making a big offline commerce play with the announcement that it will invest HK$22.4 billion (USD$2.87 billion) for a major stake in China’s top supermarket operator, Sun Art Retail.
The move comes as part of a new pair-up with French retailer Groupe Auchan and Taiwanese conglomerate Ruentex. Alibaba will purchase its stake from Ruentex. At the same time, Auchan will boost its stake. The deal gives Auchan, Alibaba Group and Ruentex 36.18%, 36.16% and 4.67% stakes in Sun Art, respectively.
Alibaba will replace Ruentex as the second-largest shareholder.
The three-way alliance is specifically seeking to go after the $500 billion food retail vertical in China. Alibaba will be adding its unique big data analysis to the offline retail location (offline is how 85% of Chinese groceries are still bought).
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