Alibaba said on Monday it would take a major stake in one of China's top food sellers for $2.9 billion as the e-commerce giant expands further into the retail world.
Alibaba will buy a 36 percent stake in Sun Art Retail Group from Taiwanese conglomerate Ruentex Group, leaving Alibaba and French firm Auchan Retail with roughly equal stakes in Sun Art's 446 hypermarkets that sell everything from groceries to clothes.
Auchan will boost its stake in Sun Art Retail to 36% after the deal.
According to the report, Alibaba's investment in Sun Art is the latest acquisition in a spree that's also included Suning Commerce and Intime Retail Group Co.
Speaking to the news site, Julia Pan, a Shanghai-based analyst at UOB Kayhian, said, "Sun Art has a pretty good supply chain so cost-wise it might make more sense than Alibaba doing everything from scratch". Sun Art also operates superstores and innovative unmanned stores under the "Auchan Minute" brand.
Trading in shares of Sun Art Retail, which was suspended on November 13 pending the the announcement, will resume on Monday.
The Sun Art investment is the latest illustration of Alibaba's efforts to seamlessly merge online and offline shopping into an "omnichannel" consumer experience, leveraging its own assets, ecosystem and technology.
It is the latest in a string of strategic moves by Alibaba as the e-commerce company continues to roll out its "new retail" vision, both within China and overseas. In contrast, Alibaba's arch-rival has been mainly collaborating with United States retailer Walmart, as the company acquired Yihaodian in June 2016.
"Alibaba is excited to join with our new partners to redefine traditional retail through digital transformation", said Daniel Zhang, chief executive officer of Alibaba Group.
"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", he said.
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.