Following the investment, Alibaba becomes the second largest shareholder in the business, which has a market cap of over USD 10 billion. Ruentex, the shareholder that sold to Alibaba, will retain a 4.67 share while French retailer Auchan Retail owns a dominant 36.18%.
The deal is part of Alibaba’s strategy to bridge the gap between its online and physical business. In recent years, the company has invested in InTime (eventually buying all the shares) and in the supermarket brand Lianhua.
The huge amount of data that the Chinese ecommerce retailer picks up through its ecommerce and payments services can be used to improve the customer experience in-store and to optimize stock management.
It is also important to note that Alibaba operates its own hybrid store called Hema, where consumers can purchase items using unmanned payment checkouts or order them for delivery. Hema also works as an incubator where the ecommerce giant creates new strategies that can work for its physical retail subsidiaries.
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