Path: Sino-US >> Business>> Companies >>
Alibaba to spend $2.9bn to buy stake in China's biggest hypermarket
Alibaba Group announced on Monday it will spend $2.88 bn on an aggregate 36.16 percent stake in Sun Art Retail Group, China's biggest operator of supermarkets that owns RT-Mart and Auchan brands, in its latest effort to push the “new retail” initiative that aims to transform traditional offline shopping centers.

On November 20, Alibaba Group, Auchan Retail S.A., and Ruentex Group, the parent company of RT-Mart, announced to have reached a “new retail strategic agreement”, based on which, Alibaba is to directly and indirectly hold 36.16 percent of Sun Art Retail shares for $2.88 bn or 19 bn yuan. The deal is believed by observers to have China's biggest marts in Alibaba's new retail plan both in the form of business mode and capital composition.

After acquiring stakes of Lianhua Supermarket and Sanjiang Shopping, Alibaba is once again buying into a giant bricks-and-mortar retailer. The listed Sun Art Retail Group owns RT-Mart, a Taiwan-based chain of hypermarkets.

Before the deal, Ruentex Group has the controlling interest in the public company, while after the deal, its shareholding will drop to 4.67 percent and Alibaba will become the second-biggest shareholder.

Some observers predict that Alibaba may further buy into the listed company in the near future on the grounds that three years after it invested into the Intime Retail, Alibaba has acquired all of the department store chain and privatized it.

Amid a slump in offline retailing business, Sun Art Retail, the biggest operator of hypermarkets in the Chinese market, is now running 446 RT-Mart or Auchan marts spanning the country's 29 provinces and regions.

The public company's Q3 financial report shows its business turnover in nine months to September 30 amounted to 79 bn yuan, rising merely 2.2 percent year-on-year, with net profit at 18.69 bn yuan. The retailer was rumored to be seeking to sell its shares to Alibaba in February, while Yin Yanliang, the president of Ruentex Group, disclosed that Alibaba, Tencent and Suning were all “pursuing” RT-Mart.

“With the rise of mobile Internet over the years, consumers' needs have gone through significant changes, so Sun Art has been trying to strengthen its online presence. Ruentex is willing to see Alibaba and Sun Art work together to coordinate online and offline businesses to satisfy the needs of our consumers,” said Huang Mingduan, the vice chairman of Ruentex Group, after the agreement was announced on November 20.

According to Zhang Yong, the CEO of Alibaba Group, physical stores are playing an indispensable role in shopping activities. In a digital economy, big data would help make more customized recommendations for consumers.

This May, multiple supermarkets affiliated to Sanjiang Shopping had gone through digital restructuring. In July, transaction amount of the chain's online deals had outrun that of its offline outlets by 25 percent.

Leveraging Alibaba's digital ecosystem, Sun Art Retail also plans to digitalize all its outlets, put “new retail” solutions into practice, integrate online and offline resources and bring consumers benefits of efficient logistics and customized shopping. 
 

Related Stories
Share this page
Touched Sympathetic Bored Angry Amused Sad Happy No comment

China is winning electric cars 'arms race'Alibaba to spend $2.9bn to buy stake in China's biggest hypermarketAirbnb unveils new China strategy after management shakeupTrump tweets he should have left UCLA players in Chinese jailFuturistic library goes viral on social mediaChina’s third-largest bike sharing company closes amid financial troubleMiddle school in south China criticized for spread of tuberculosis among studentsHow Chinese magazines reported the historic 19th National Congress of the Communist Party of China #Sino-us.com#Fight the frost with these spicy winter dishesThe guide's guide to tourism in Beijing
< Prev Next >