Alibaba Group Holding Ltd (NYSE:BABA) Channels Fresh Investments Into Its New Retail In A Bid To Up Its Ante

Alibaba Group Holding Ltd (NYSE:BABA) has made its entry into a strategic alliance with Auchan Retail S.A and Ruentex Group. It is undertaking this as part of ramping up “New Retail” efforts in China.

Alibaba has expressed its next plan, which will be to purchase a 36.2% stake in Sun Art Retail Group, a top hypermarket operator in China. If everything moves according to plan, Alibaba will have an upper hand. It will eventually become the second largest stakeholder in Sun Art.

Sun Art has managed to set up about 446 hypermarkets across 29 provinces in China under “RT-Mart” and “Auchan” banners. It has also been running a series of unstaffed stores under the “Auchan Minute” brand.

The Chief Executive Officer of Alibaba Group, Daniel Zhang, opined, “by fully integrating online and physical channels together with our partners, we look forward to delivering an original and delightful shopping experience to Chinese consumers. We observe that Alibaba stock has gained 110.8% year to date, substantially outperforming the 60.1% rally of the industry it belongs to.”

In a note, Alibaba disclosed that the newly formed alliance was part of its latest Retail push. The objective of this particular strategy will be to help in bridging the gap between offline and online shopping using big data capacity. The other thing was the adoption of new strategies in line with cross marketing, distribution and the inventory networks.

The central objective is to get to tap into China’s massive retail space which has been rated to be about $5 trillion. It is made up of both offline and online options. China has in the last few years experienced immense growth of e-commerce. The offline retail accounts for almost 85% of total retail sales in China. It seems that might be moving higher anytime soon.

Increased competition is a reality that the company has had to come face to face with in the current times. It is doing all within its means to maintain its relevance in the market.

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