Alibaba buys stake in Lianhua Supermarket to expand bricks-and-mortar retail business

Updated 2017-05-27 09:01:09 Shanghai Daily

Alibaba has made another major effort in the physical retail space as it announced today (May 26, Friay) it is acquiring 18 percent of stake in Lianhua Supermarket Holdings, an affiliate of local retail conglomerate Bailian Group.

The announcement came after the signing of a strategic partnership with Bailian Group in February this year.

Alibaba will acquire a total of 201,528,000 shares of Lianhua Supermarket from Yiguo.com, a fresh food e-commerce platform, to become Lianhua's second largest shareholder, according to a stock exchange filing from Bailian Group today.

Lianhua Supermarket has more than 3,600 physical outlets in 19 provinces and municipalities and the two parties are laying out specific plans for future business collaboration, according to a joint statement.

The deal will be subject to domestic regulatory and shareholder meetings' approvals.

Yiguo.com will still hold about 1.17 percent stake in Lianhua Supermarket to complement each other in terms of supply chain and logistics operations.

Alibaba Group chairman Jack Ma has been pushing forward the so-called new retail, where consumer experience would converge whenever they shop online or offline.

The Hangzhou-headquartered e-commerce giant hopes to leverage its technology and data capability provide businesses with competitive support and easier connection with consumers.

Its previous ventures in offline retail include a share-swap deal with Suning Commerce Group and a privatization deal to merge with brick-and-mortar retail chain Intime.

Alibaba's payment affiliate Alipay would also be integrated with Bailian's prepaid card services but no specific timetable and collaboration detail has been released yet.

Online and offline retailers are embracing each other as e-commerce operators are seeking offline foot traffic to bring in additional sales while brick-and-mortar stores are hoping to leverage digital technologies to upgrade customer services.

In a bid to reshape the retail landscape, Internet giants like Alibaba and JD.com has been strengthening their presence in offline retail channels and beefing up logistics infrastructure.

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