Daniel Zhang, chief executive of Alibaba, said: "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". "Sun Art is known for its innovative ideas; under its brand 'Auchan Minute", the group operates unmanned retail stores in China.
Alibaba noted in a press release that this alliance is part of its New Retail push.
In August, Amazon bought USA upmarket grocery chain Whole Foods Market for US$13.7 billion, the biggest acquisition in the e-commerce giant's history, in an aggressive push further into physical stores and merge online and offline retail. Ruentex, the shareholder that sold to Alibaba will maintain a 4.67 share while French retailer Auchan Retail possesses a commanding 36.18 percent.
Hong Kong-Alibaba Group Holding Ltd.'s $3.7-billion deal to buy a slice of China's largest hypermart chain pits it against Wal-Mart Stores Inc.in the world's largest retail arena.
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Under the deal, Alibaba Group, will form a strategic alliance with Auchan Retail and Ruentex Group, the e-commerce giant said in a separate statement.
"The new-retail strategy seems to be the new trend for e-commerce giants".
"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", he added. So far, it has spent up to $9.3 billion since 2015.
Either way, developments such as these are rendering the term "e-commerce" increasingly nebulous, also suggesting that there are limits to consumer's appetites for in-home deliveries, or their willingness to give up perusing the aisles for something that strikes their fancy.
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Shares of Hong Kong-listed Sun Art, which were suspended on November 13, resumed on Monday and were down 5.3 percent in morning trade, while the benchmark index .HSI was flat.
In August, Alibaba Group, which owns the South China Morning Post, led a US$300 million investment in Yiguo.com, a Chinese fresh produce online market place.
Sun Art is a grocery store leader in China, with its brands taking about 15 percent share in the hypermarket business in the country, followed by Walmart stores with 10 percent, Bloomberg reports, citing Euromonitor data.
"The acquisition by Alibaba is part of its investment diversification", said Andy Kwan, a Hong Kong-based director at ACE Centre for Business and Economic Research.
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