Alibaba acquires 36% stake in Sun Art Retail

Alibaba, the Chinese e-commerce giant founded in 1998 by Jack Ma, has invested US $2.88 billion to acquire a 36% stake in Sun Art Retail Group, a leading Chinese hypermarket operator with a 14% market share (operating a total of 446 hypermarket complexes in 29 Chinese provinces with a total gross floor area of around 12 million square metres).

Jack Ma’s strategy is to transfer the Alibaba model and its payment systems from the internet to physical stores. For this purpose it has forged an alliance with the French group Auchan, which after completion of the operation will hold an equal stake in Sun Art Retail.

A physical retail presence will also allow access to the fresh food segment, an area that has always been problematical for e-commerce due to the perishable nature of the goods.

Alibaba recently also purchased Intime Retail and is working on More Mall, a five-floor shopping mall which will feature international retail brands as well as unique brands from Alibaba’s e-commerce platform.