Alibaba sells hypermarket operator Sun Art for US$1.7 billion to refocus on e-commerce | South China
Alibaba Group Holding has finalized a deal to sell its entire stake in Sun Art Retail Group to Chinese private equity firm DCP Capital for US$1.7 billion. The agreement was signed on December 31, marking a significant step in Alibaba’s strategy to streamline its focus on core e-commerce and cloud computing businesses.
The deal involved selling shares at HK$1.75 per share, resulting in an estimated loss of 13 billion yuan (US$1.8 billion) for Alibaba. This is Alibaba’s second major exit from offline retail in recent months. In December, the company divested its stake in Intime Retail, incurring a 9.3 billion yuan loss.
Alibaba initially invested in Sun Art in 2017 and later gained control in 2020 by acquiring shares from its former French owner, the Mulliez family, for HK$28 billion. Sun Art, known for operating supermarket brands RT-Mart and Auchan, was integrated into Alibaba’s ecosystem, including platforms like Ele.me and Tmall Supermarket.
The vision of blending online and offline retail, however, faced challenges. Economic slowdowns, the pandemic’s impact on consumer spending, and increased competition from platforms like Pinduoduo and Douyin forced Alibaba to reassess its strategy.
Alibaba’s CEO, Eddie Wu Yongming, emphasized that the sale would allow the company to focus on high-priority areas such as e-commerce growth and cloud computing. In a recent restructuring, Alibaba also merged its domestic and global e-commerce operations under Jiang Fan’s leadership to strengthen its market position.
Alibaba’s stock closed at HK$82.40 on the last trading day of the year, reflecting a significant drop from its 2020 peak. Investors had speculated about Sun Art’s divestment since September when its shares were temporarily suspended amid rumors of a sale.
This strategic move highlights Alibaba’s shift back to its roots in online retail, as it aims to remain competitive in a rapidly evolving digital marketplace.
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