After the transaction is completed, Alibaba Group will own 72 percent of Sun Art.
The lockdowns of the Coronavirus have increased the demand for food online in China, Despite the lifting of the lockdowns, much continues to be bought online.
Alibaba Group doubles its actual stake in Hong Kong-listed Sun Art by purchasing a 70.9 percent stake in A-RT Retail Holdings, which owns 51 percent of Sun Art.
(A-RT Retail Holdings) is controlled by (Auchan Retail), which is based in France. After the deal closes, Alibaba Group (Sun Art) will incorporate into its financial statements.
Alibaba Group said it was interested in buying the remaining Sun Art shares for $ 2 billion.
Sun Art formed a strategic alliance with the Alibaba Group in 2017 to digitize its stores.
The Alibaba Group invested for the first time in (Sun Art) in 2017, spending about $ 2.88 billion to acquire a 36.16 percent stake in the chain, as part of its new retail strategy.
The new retail strategy aims to blur the lines between online and offline commerce through steps, such as converting physical stores into online order-taking points, integrating supply chains, and enabling shoppers to use the same digital payment methods in physical stores.
All of Sun Art’s 484 physical retail sites – in China – are now integrated into the Taoxianda and Tmall platforms of the Alibaba Group’s grocery store, as well as the Ele.me food delivery app and the activities app. Logistics (Cainiao).
For customers, this means faster deliveries and greater choice, while giving the Alibaba Group more data sources it can use to improve its supply chain and business processes.
Other e-commerce companies are taking a similar approach to integrating online and offline grocery shopping, among them is the main competitor (JD), which has similar alliances with supermarket group Walmart and Yonghui.
China’s supermarket and hypermarket industry reached 4.7 trillion yuan in retail sales in 2019, accounting for nearly half of all grocery sales.