Alibaba's offline march continues with $2.9bn stake in China hypermarket chain

By Gary Scattergood contact

- Last updated on GMT

Sun Art operates RT-Mart stores, among others.
Sun Art operates RT-Mart stores, among others.
Alibaba is continuing to expand its offline retail presence by taking a 36% stake in China’s leading hypermarket chain, Sun Art Retail Group.

The US$2.9bn is part of an alliance with France’s Auchan Retail S.A. and Taiwan’s Ruentex Group. Alibaba is buying its stake from Ruentex, while Auchan Retail is increasing its stake, also to 36%. Ruentex will retain a 4.67% share.

Sun Art currently operates 446 hypermarkets in 29 provinces under the 'RT-Mart'(大润发) and 'Auchan' (欧尚) banners.

It also operates superstores and unmanned stores under the 'Auchan Minute' brand.

The three firms said in a joint statement that the alliance reflects Alibaba’s ‘New Retail’ vision to leverage its Internet-based approach and new technology, while working closely with retailer partners to provide a seamless online and offline experience to consumers in China.

Building on the strengths of the three partners, the alliance "aims to introduce a new shopping experience to China’s 1.3 billion consumers".

“Alibaba is excited to join with our new partners to redefine traditional retail through digital transformation,”​ said Alibaba Group CEO Daniel Zhang.

“Physical stores serve an indispensable role during the consumer journey, and should be enhanced through data-driven technology and personalised 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.”

Word-class experience

Auchan Retail CEO Wilhelm Hubner added: “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.”

The alliance clearly sees vast opportunities in China’s US$500bn food industry, and is likely to pool resources to improve efficiency and share online and offline data to better target consumers.

It is believed that Alibaba has pumped in almost $US10bn in traditional brick and mortar stores in recent years.

In July, it opened three new supermarkets in Beijing and Shanghai under the ‘Hema’ brand.

While they look like normal stores, shoppers order groceries for delivery from their mobile phones and use Alipay to make payments.

Alibaba said every item has barcodes that can be scanned to reveal price and product information.

"Hema leverages data and smart logistics technology to seamlessly integrate online-offline systems, built to provide the unparalleled service of fresh food deliveries in 30 minutes," said Alibaba CEO Zhang at the time.

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