Alibaba and Auchan form strategic partnership in China

Alibaba and Auchan become the two majority shareholders of Sun Art Retail Group, which operates 490 food stores in China. The new alliance aims to combine the physical and digital expertise of the two entities to offer a better shopping experience to customers.

Amazon is not the only giant e-commerce to covet the world of brick and mortar (physical stores in good French). Chinese giant Alibaba has announced an investment of 2.44 billion euros to acquire 36.16% of Sun Art Retail Group, which operates 490 food stores in China (including 446 hypermarkets) and employs 140,000 people.

alibaba

The goal of this equity investment is to bring the Sun Art Group’s brands to Alibaba’s broad ecosystem, articulated throughout the value chain, from online commerce to payment, social media, entertainment and video. . The Chinese Amazon holds the marketplaces Tmall.com and Tmall Global, but also Taobao, the equivalent of eBay, the payment application Alipay or the Youku video platform.

Alibaba, already a foot in the physical trade

If the operation has such a resonance (one of the most popular news on Twitter this morning with more than 12,500 tweets) is that the largest shareholder of the group Sun Art Retail is none other than the French Auchan Retail, which holds 36.18% of the capital. Ruentex, the Taiwanese company that sold its shares to Alibaba, now has only 4.67% of the capital. The three parties said in a joint press release, “to unite their expertise in physical and digital commerce to explore new opportunities in the food trade sector in China”.

While Alibaba’s investment may echo that of Amazon, which took over Whole Foods last June, the two operations are not quite similar. Notably because this is not Alibaba’s first foray into the world of physical commerce. Since 2015, Alibaba has deployed around fifteen hyperconnected hypermarkets called Hema Fresh. Last January, the company founded by the whimsical Jack Ma launched a takeover bid on Intime, a group that manages 17 shopping centers and 29 department stores in China. The Chinese e-commerce giant has also invested more than 4 billion euros in Suning’s electronics store chain.