Alibaba gets its Whole Foods with new $3.6 billion investment in Chinese supermarket operator

The company announced Monday morning that it plans to invest $3.6 billion in Sun Art Retail Group Ltd., which operates supermarkets and larger “hypermarkets” in China. The investment will bring Alibaba’s BABA, -0.65% aggregate direct and indirect stakes in the company up to about 72%, and Alibaba intends to consolidate Sun Art in its financial statements.

The grocery industry is typically viewed as a low-margin business for traditional operators, but technology companies see potential in bridging together online and offline components, while learning more about customer preferences and delivering more personalized experiences. Alibaba said in a release that all physical Sun Art locations in China are integrated with the Alibaba Taoxianda and Tmall supermarket platforms for one-hour and half-day delivery options. Sun Art operated 481 hypermarkets and three midsize supermarkets as of June.

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