Alibaba to Invest $2.9 Billion in Chinese Retail Megastore Operator

Alibaba Group has agreed to invest about $2.9 billion in one of China’s largest operators of retail megastores, according to a person familiar with the matter.

The investment in Sun Art Retail Group, one of Alibaba’s biggest deals to date, accelerates the e-commerce giant’s expansion into the offline retail world. The deal effectively gives Alibaba a roughly 36% stake in Sun Art, making it a major shareholder, the person said. Hong Kong-listed Sun Art, which operates so-called hypermarkets, has a market capitalization of about $10.5 billion. An Alibaba spokeswoman declined to comment.

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Apart from its strategic alliances, Alibaba has launched its own grocery store chain called Hema, where shoppers use mobile apps to pay at unstaffed cashier stations or arrange deliveries. Hema also is a sort of laboratory for Alibaba to collect and analyze shopping data to come up with new services it can offer at other brick-and-mortar retailers such as Sun Art.

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