Alibaba to control top Chinese hypermarket operator - Business Insider

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Acquiring a controlling stake in Sun Art for $3.6 billion will give Alibaba a 72% stake in the firm, which has the leading share of China's hypermarket industry

to enable approximately 15% of the firm's total revenue in Q2 2020 via services including ship-from-store delivery.

Taking control of Sun Art should bolster Alibaba's omnichannel capabilities, strengthening its ecommerce operations and its position in brick-and-mortar. All of Sun Art's stores are already integrated with Alibaba's Tmall marketplace and offer one-hour and half-day delivery through the etailer's on-demand delivery and logistics businesses.

And now that Alibaba will have a leading stake in Sun Art, it could deepen those integrations and form new ones so that Alibaba can fulfill more ecommerce orders from stores to save on logistics fees and offer faster delivery, which should be valuable since the coronavirus pandemic has Sun Art will also bolster Alibaba's brick-and-mortar portfolio that already includes 214 Freshippo grocery stores, positioning it to rack up more sales since ecommerce is expected to account for only 41.

 

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