Alibaba puts over 2 billion in hypermarket operator to sustain the push of its offline retail

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Alibaba has decided to promote further the expansion of its offline retail after the Chinese giants bought up one of the prolific operators in China. Over one-third of this market was bought by the company.

The firm made public today that it had expended over 2.5 billion dollars to purchase 36.16 percent in the Sun Art Retail Group, a business listed in Hong Kong that manages over 400 hypermarkets in more than 200 cities in China’s mainland.

The deal has established Alibaba as the second largest shareholder in the sphere of the business, which possesses a market cap of more than 9 billion dollars. The shareholder Ruentex who gave to Alibaba, will have a 4.67 share as French retailer Auchan Retail owns a major percentage of it (36.18%).

The data was first to make the investment known before going public with the information on Monday.

Comparison between Amazon and Alibaba

The deal will bring inescapable comparisons between the acquisitions by Amazon of Whole Foods for over 13 billion dollars this year, but that would not be rightly placed. The Whole Foods deal made a significant point for the induction of Amazon into the world of the physical retails, however, the move by Alibaba into the offline realm was made years ago, and this is only the biggest fraction of the entire strategy.

Alibaba had acquired a 35 percent part of the operator of the department store InTime back in 2014 and then claimed 20 percent Suning, giants in retail for 4.6 billion dollars in 2015, but it reserved its interests in 2017. This January the remainder of InTime was taken up by the company, and they then immediately made the group private, while it went on to invest in Lianhua, a supermarket brand.