Alibaba is up after buying a big stake in China's largest grocer (BABA)

pulse

November 20, 2017 5:02 PM

In a move reminiscent of Amazon's acquisition of Whole Foods, Alibaba buys a major stake in a big Chinese grocer.

Alibaba is rising after buying a major stake in a Chinese grocer.
The move echoes Amazon's purchase of Whole Foods for $13.7 billion earlier this year.

Shares of Alibaba are up 2.33% to $189.45 on Monday after the company bought a $2.87 billion stake in China's largest grocery operator.

Alibaba said on Monday it would make an investment in Sun Art Retail Group, which owns 8.2% of China's total grocery market.

The move is reminiscent of Amazon's $13.7 billion deal for Whole Foods, though Alibaba will be only the second-largest shareholder in Sun Art, as opposed to owning the company outright. Alibaba's stake would represent about 36.16% of the company's shares, second only to the French retailer Groupe Auchan's 36.18% stake.

China's food retail sector is worth about $500 billion annually, and about 85% of those sales are made offline.

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