After breaking another record with RMB 168.2 billion (more than $25.3 billion) in GMV achieved in 24 hours on Singles’ day, Alibaba is touting its foray into its new retail strategy as it announced today a strategic alliance with Auchan Retail S.A. and Ruentex Group that brings together their online and offline expertise to explore new retail opportunities in China’s food retail sector.
The alliance reflects Alibaba’s “New Retail” vision to leverage its internet-based approach and new technology while working closely with retailer partners to provide a seamless online and offline experience to consumers in China. Building on the strengths of the three partners, the alliance aims to introduce a new shopping experience to China’s 1.3 billion consumers.
With this collaboration, Alibaba is building ties with France, as Auchan Retail S.A or Groupe Auchan S.A. is a French international retail group with a presence in France and 15 countries. In contrast, Alibaba’s arch-rival has been mainly collaborating with US retailer Walmart, as the company acquired Yihaodian in June 2016.
As part of this strategic alliance, Alibaba Group will invest a total of HK$22.4 billion (approximately US$2.88 billion) to obtain an aggregate direct and indirect stake of 36.16% in Sun Art Retail Group Limited by acquiring shares from Ruentex. The transaction will give Auchan Retail, Alibaba Group and Ruentex approximately a 36.18%, 36.16%, and 4.67% economic interest in Sun Art, respectively.
Sun Art (高鑫零售有限公司), a leading multi-format offline food retailer in China, operates with a total gross floor area of approximately 12 million square meters in China, as of June 30, 2017. The Hong Kong-based company has been in China’s O2O scene since 2015. The e-commerce business platform of Sun Art’s retail arm Feiniu (飛牛網) officially commenced its O2O program in May 2015. In April 2015, Sun Art Retail acquired online grocery store Fieldschina (甫田網) and Xiaohehe (校呵呵), a mobile O2O platform targeting at university campuses in September 2015.
In China, Auchan Retail is the main shareholder of Sun Art Retail Group, and Sun Art currently operates 446 hypermarkets in 29 Chinese provinces under the “RT-Mart” (大润发) and “Auchan” (欧尚) banners. In 1998, Sun Art opened first RT-Mart hypermarket complex in Zhabei district of Shanghai, followed by first Auchan hypermarket complex in Yangpu district of Shanghai. Recently, Auchan signed a contract with Hisense on a new unmanned store prototype called “Auchan Minute”.