---
title: "Alibaba Completes Acquisition of RT-Mart Parent, Retail Integration May Be Faster Than Expected!"
description: "Alibaba's tender offer for Sun Art Retail has been completed, securing 71.98% of its shares, fully integrating RT-Mart and Auchan into the Alibaba ecosystem. The offer closed on January 12, 2018, with Alibaba and its concert parties holding approximately 71.98% of issued shares."
author: "李又寻欢"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-01-13"
language: "en"
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# Alibaba Completes Acquisition of RT-Mart Parent, Retail Integration May Be Faster Than Expected!

> Alibaba's tender offer for Sun Art Retail has been completed, securing 71.98% of its shares, fully integrating RT-Mart and Auchan into the Alibaba ecosystem. The offer closed on January 12, 2018, with Alibaba and its concert parties holding approximately 71.98% of issued shares.

Alibaba's tender offer for Sun Art Retail has been settled, obtaining 71.98% of Sun Art Retail's shares, and RT-Mart and Auchan are now fully integrated into the Alibaba ecosystem.

On the evening of January 12, Sun Art Retail announced that the offer made by CICC on behalf of the offeror closed at 4:00 p.m. on January 12, 2018. The offer was not modified or extended.

The offeror received a total of 303,560 offer shares, accounting for approximately 0.0032% of the issued shares. The offeror and its concert parties held interests in a total of 6.867 billion shares, accounting for approximately 71.98% of the issued shares. Public shareholders held 2.0688 billion shares, exceeding the minimum public float requirement of 19.38% under the Listing Rules.

**At this point, Alibaba's equity investment and tender offer for Sun Art Retail have been fully completed. The offeror and its concert parties (including the offeror (Alibaba), Jixin, Auchan International, Kofu, and CGC) ultimately obtained 71.98% of Sun Art Retail's shares, with Alibaba still being the second-largest shareholder.**

If investing in Bailian was one shoe dropping for Alibaba, then completing the "incorporation" of RT-Mart is the more important one. In a sense, this is the most valuable offline retail asset Alibaba has gained since it began its acquisition spree in physical commerce.

Because RT-Mart and Auchan together operate 446 hypermarkets in China, with revenue exceeding 100 billion yuan in 2016. Among them, RT-Mart accounts for the vast majority of stores, and its share of the national hypermarket market exceeds 14%—although Bailian is also a giant, in terms of national influence, RT-Mart and Auchan are the true kings.

If Alibaba's previous investments were laying the foundation, then from today, a new era for China's retail industry has officially begun.

The integration of online enterprises with offline retail will not end with RT-Mart and Auchan.

According to Alibaba's plan, both parties will carry out new retail transformation with big data and commercial internetization as the core. Among these, store upgrades are the most critical part. In the coming years, the two parties will upgrade all 446 hypermarkets of Sun Art Retail nationwide. This means that the hypermarket format, which occupies the absolute mainstream of China's retail market, will undergo revolutionary upgrades and innovation, and previous efforts were just minor adjustments. Moreover, this innovation and upgrade will be at the forefront of international retail, **and to some extent, this is a curve overtaking by China's local retail over the long-dominant foreign retail.**

Alibaba CEO Daniel Zhang also stated that the core of the new retail transformation for RT-Mart and Auchan is to first complete digital transformation, laying the foundation for the next steps. The digital transformation of physical stores includes digitization of products, customer flow, and the entire business premises. On this basis, real-time collection and application of data on people, goods, and places will be the prerequisite for future chemical reactions.

Alibaba will use big data and commercial internetization as the core, complete the reconstruction and upgrade of "people, goods, and places" in offline stores through comprehensive digitalization, integrate the resources of the three companies, leverage Alibaba's digital ecosystem, promote store digitalization, and apply new retail solutions to RT-Mart and Auchan stores, including online-offline integration, modern logistics, and personalized consumer experiences.

However, Yuan Bin, COO of RT-Mart's new retail, said in a media interview a few days ago that the Hema model may not be suitable for RT-Mart. Nearly 70% of RT-Mart's stores are located in third- and fourth-tier cities, and most are in suburban areas. Hema Fresh's average order value and brand positioning determine that it is mostly located in commercial centers of first- and second-tier markets, so the two may not be fully compatible.

**According to Yuan Bin, around the Spring Festival, RT-Mart plans to launch a new model with Alibaba that is suitable for hypermarket formats in third- and fourth-tier regions, different from existing species.**

In fact, Alibaba's integration of RT-Mart has already begun at the product level. On December 29, 2017, RT-Mart China entered into a supply agreement with Tmall Supply Chain (a related party, an indirect wholly-owned subsidiary of Taobao China), under which RT-Mart China agreed to purchase and Tmall Supply Chain agreed to supply relevant products on a non-exclusive basis for sale in RT-Mart stores operated by the group. On January 2, 2018, Tmall announced that hundreds of Tmall Supermarket products had been listed in 167 RT-Mart stores across 20 cities in East China, covering categories such as snacks, household cleaning, storage, personal care, and beauty.

As Lingshou pointed out in a previous article, spending hundreds of billions of yuan to develop physical commercial positions in the new retail strategy—you can call Alibaba a tycoon, or say that not all will succeed in the future, but objectively speaking, as a fairly successful company, you cannot help but admire its courage and boldness—at least in physical commerce, we have never seen such.

Some say that the offline companies Alibaba has acquired have not yet exploded, and Alibaba's acquisition approach is to use money to buy resources, and integration is not easy. But remember, Rome was not built in a day. Alibaba's goal is not to use money to simply expand commercial territory, but to use internet technology, products, and concepts to transform the genes of retail.

Over the past year, Alibaba has been outlining the contours of new retail. Alibaba also called the 2017 Tmall Double 11 a "grand parade" to test new retail: in addition to 168.2 billion yuan in transaction value, 100,000 smart stores seamlessly connected brands and consumers; 60 brands and Tmall jointly created Double 11 smart pop-up stores showcasing tech products and interactive forms; and the "Catch the Cat" game across more than 50 business districts in 11 cities attracted 50 million participants. Over 500,000 small retail stores were launched, and one million stores achieved online-offline integration, making the 2017 Tmall Double 11 a global business collaboration.

After multiple Sanjiang Shopping supermarkets completed digital transformation, online transaction amounts exceeded 25% of total store sales in July, and they gained many new members, while existing members' transaction amounts also grew by 18%. During Double 11, 51 Intime department stores nationwide saw a 59% year-on-year increase in customer traffic and a 54% increase in sales. In the apparel industry, only 300 brands' 50,000 stores saw a 235% increase in service numbers on Double 11, and Uniqlo's omni-channel transactions grew 3.5 times year-on-year.

Alibaba also recently signed an agreement with Shiji Information to acquire 38% of its subsidiary Shiji Retail for no more than $500 million (Shiji Retail owns Changyi Technology, Fuji Rongtong, Kechuan Technology, Shanghai Shiyun Technology, and other major retail information solutions providers)—Alibaba hopes to integrate the information flow, capital flow, and supply chain system of offline retail, and it already has such integration capabilities, which no other company has achieved so far.

**From this perspective, the investment in Sun Art Retail is a major event, with greater strategic significance than previous investments, but it is still just a node in Alibaba's strategic layout. As Zhang Yong said, it is "improving the offline layout of FMCG, especially in the food sector."**

In Lingshou's view, Alibaba is planning for the long term, not just for short-term performance, but to transform physical commerce. In upgrading traditional commerce, it also realizes another turn in its own corporate strategy—this is both an exploration of China's commercial upgrade and a bet on Alibaba's own future.

This will definitely lead to a change in China's retail industry. As Lingshou pointed out in the "2018 China Retail Development Forecast," will you voluntarily surrender, or wait to be captured? Or you can hold your ground and become a pole in the regional market—only a very few companies are qualified for this.

In an era of comprehensive openness and cooperation, the result of closure and conservatism can only be extinction. Retail has no reason to refuse such integration, because whoever refuses is joking with their own future.

As the Ministry of Commerce's "Entering a New Era of Retail—Deep Interpretation of New Retail" states, physical retail and e-commerce are no longer opposites; integrated development has become an inevitable trend. China has entered a new retail era of high integration of online, offline, logistics, technology, and big data. Physical retail has warmed up for the first time in five years, and social retail has entered a golden period.

But this does not mean your company will also share in this dividend—if you do not embrace this unprecedented era. **Because retail without technology will be worthless in the future.**

Source: Lingshou (ID: lingshouke)
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