Alibaba paid $3.6 billion to double its stake in mainland market chain Sun Art Retail, the company announced this week in a move that will see the Chinese e-commerce mammoth replace the wealthy French Mulliez family as primary company stakeholder.
Alibaba bought a 70.9% stake in the Mulliez-controlled A-RT Retail Holdings, which owns 51% of Sun Art, bringing its total direct and indirect stake in the retailer to 72%.
"As the COVID-19 pandemic is accelerating the digitalization of consumer lifestyles and enterprise operations, this commitment to Sun Art serves to strengthen our New Retail vision and serve more consumers with a fully integrated experience," Alibaba chairperson and CEO Daniel Zhang said in a statement.
Hong Kong-listed Sun Art operates 481 hypermarkets - a blend of department store and grocery supermarket à la Cosco - and three supermarkets across mainland China, which have now been integrated into Alibaba's chain of Taoxianda and Tmall physical stores.
Sun Art's integration into the Alibaba platforms, including logistics and food delivery branches, means customers can opt for one-hour or half-day delivery on goods they purchase.
Shares in both companies surged after the announcement, with Sun Art shares rising up to 28% at one point Monday morning to reach HK$10.14 and Alibaba stock value hitting HK$299.60.
Alibaba is the parent company of Taobao, the world's largest online retailer, but its reach extends far into offline as part its New Retail strategy that straddles both online and offline retail spaces.
Case in point, the Hangzhou-based company has been moving into the brick-and-mortar store space lately, with Sun Art the most recent in a series of acquisitions.
The company previously bought a 15% stake in China's second largest home decorating group, Beijing EasyHome Furnishings, as well as control over 38% of mainland software retailer Shiji Retail Information Technology.
