HANGZHOU: Alibaba Group Holdings said on Monday (Oct 19) it will invest US$3.6 billion to boost its stake in hypermarket operator Sun Art Retail Group, gaining further ground in China's retail market.
The e-commerce giant is hoping to further leverage its digital presence to support Sun Art's 481 hypermarkets and three mid-size supermarkets in China. The move comes as Alibaba steadily expands its presence in China's offline retail sector, as growth in traditional e-commerce slows.
Alibaba, which already owned 21 per cent of Sun Art through a unit, will raise its stake to around 72 per cent through the acquisition of a similar stake in A-RT Retail Holdings, who owns 51 per cent of Sun Art.
"As the COVID-19 pandemic is accelerating the digitalisation 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 Chairman and Chief Executive Officer Daniel Zhang said in a statement.
Alibaba added that Peter Huang would be appointed chairman of Sun Art on top of his current role as chief executive officer.
Shares of Sun Art soared more than 20 per cent at the open on Monday after Alibaba made the announcement.
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