Alibaba bets US$2.9b on China's top hypermarket player

Hong Kong

ALIBABA Group Holding Ltd agreed to buy a stake in China's largest operator of Wal-Mart-style hypermarkets for about US$2.9 billion, making its latest bet on the evolution of brick-and-mortar retail.

Alibaba is acquiring 36 per cent of Sun Art Retail Group Ltd, which operates about 400 hypermarkets under the Auchan and RT-Mart banners. As part of the deal, France's Auchan Retail SA will raise its stake in Sun Art to a similar level and form an alliance with the Internet giant to tackle Chinese food retail.

The deal marks Alibaba's latest investment in old-school shopping, as it pursues an ambition to shake up a US$4 trillion brick-and-mortar retail arena.

It's also a major foray into groceries for China's largest e-commerce operator, escalating competition with Wal-Mart Stores Inc in the hypermarts that offer everything from fresh produce to e…