Alibaba Group Holding Ltd will spend more than 2 billion yuan ($290 million) buying about one-third of Sanjiang Shopping Club Co, picking up a slice of a regional Chinese discount supermarket chain, which has more than 1 million members.
China’s largest e-commerce company will hold about 32 percent of Sanjiang, it said in a filing. It will buy 1.52 billion yuan of new shares, 438.6 million yuan of stock from existing holders, and 188 million yuan of convertible bonds via a private sale.
The deal marks Alibaba’s latest acquisition of bricks-and-mortar retail, as it tries to revamp traditional offline and online models. Billionaire co-founder Jack Ma’s goal is to replace distributors and middlemen and let stores buy directly from suppliers based on real-time demand and inventory.
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Sanjiang, a local take on Sam’s Club, sells groceries at discounted prices and operates about 160 stores scattered across the prosperous eastern province of Zhejiang.
“Sanjiang shopping has an extensive offline network and experience in running retail stores,” the companies said in the filing. The two companies will work in procurement and logistics, and integrate business lines.
Alibaba has invested in physical retail – including in Suning Commerce Group Co and Intime Retail Group Co – to flesh out its online shopping offerings, open up new sales channels and improve its logistics network.
(Source: China Daily)