Alibaba places $2.8b bet on 'new retail' amid saturated markets

[Photo: from VCG]

Alibaba Group recently announced that it would invest about $2.88 billion into one of China's largest grocery operators as part of a broader drive to integrate traditional offline and online retailing and create a "new retail" environment.

The move represents the e-commerce giant's answer to pressure from rival JD.com, which has a big presence in online grocery retailing, as well as to saturated online and physical retail markets.

Alibaba said that, as part of a strategic alliance with Auchan Retail SA and Ruentex Group, it will invest 2.88 billion US Dollars to acquire a total direct and indirect stake of 36.16 percent in Sun Art Group.

According to the joint statement, under the alliance, Auchan Retail and Ruentex will hold 36 percent and 4.7 percent stakes, respectively, in Sun Art, which operates 446 hypermarkets in 29 provincial-level regions in China.

Their joint statement says that the alliance reflects Alibaba's 'New Retail' vision to leverage its Internet-based approach and new technology, while working closely with retail partners to provide a seamless online and offline experience to consumers in China.

The alliance represents the latest move in Alibaba's aggressive investment in brick-and-mortar retailers in recent years, including electronics retailer Suning Commerce Group and supermarket chain Sanjiang Shopping Club Co. Since 2015, Alibaba has invested more than $9.3 billion in physical stores.  

The audio clip is from Studio+, produced by CRI.