Alibaba CEO Daniel Zhang. Photo credit: World Economic Forum / Greg Beadle, licensed under Creative Commons

Chinese e-commerce giant Alibaba has announced that it’s reached a deal to pony up roughly $3.6 billion in order to hike its stake in Sun Art, a major Chinese brick-and-mortar retailer, to 72%. Alibaba, which previously held a minority stake in Sun Art, will pay $3.6 billion to acquire a further equity interest from Auchan Retail International S.A., the retailer’s parent firm. Following the completion of the acquisition, Alibaba now in control of Sun Art will begin reflecting the company in its financial statements.

Under the terms of Alibaba’s deal, Sun Art’s current CEO, Peter Huang, has been bestowed concurrently with the Chairman position. 

Alibaba first bought into Sun Art in 2017 with a $2.9 billion investment that gave it a stake of roughly 36%. 

In recent years, Alibaba has adopted the strategy of betting big on brick-and-mortar retailers to boost business, with the company working to integrate traditional brick-and-mortar retailing with its e-commerce services. It’s such that since 2015, Alibaba has poured billions of dollars into brick-and-mortar retailers majorly from Asia.

Sun Art is a major supermarket chain in China, currently with 481 hypermarkets and 3 mid-size supermarkets in the country. Already, all of Sun Art’s stores have been integrated into Alibaba’s Taoxianda and Tmall e-commerce platforms.

Being a major Chinese retailer, Sun Art in its most recent fiscal year generated revenues equivalent to $14.6 billion.

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