Alibaba Group, China’s most valuable company with a market capitalization of $800+ billion, is paying $3.6 billion to gain more control of Sun Art Retail Group, which operates 480+ large supermarket stores. As in the U.S. and elsewhere, COVID-19 has seen many consumers shift to online shopping for food and other essentials. In 2017, Alibaba acquired a 36 percent stake in Sun Art for about $2.9 billion. With the latest purchase, Alibaba will own about 72 percent of the company and is positioned to compete with Walmart.

The Wall Street Journal reports that, in 2019, Sun Art had “revenue of 95.4 billion yuan, equivalent to $14.2 billion,” which, in the first half of 2020, grew 5 percent from the same period in 2019, to 43.2 billion yuan ($7.9 billion).

Sun Art’s big box stores, “sell everything from groceries to clothing and toys” and, according to Euromonitor International, “had a 14.1 percent share of the country’s hypermarket sales last year.” In comparison, said Euromonitor, Walmart had a 10.3 percent market share of big retail outlets. In 2016, Walmart “sold its Chinese e-commerce website to JD.com, Alibaba’s main e-commerce rival.”

Alibaba has a “booming and fast-growing online retail business” and has been “building its presence in physical grocery stores in China.” It owns Freshippo, the brainchild of Alibaba chair and chief executive Daniel Zhang, which is a “supermarket chain with 220+ stores” that also offers online shopping with orders “delivered within hours.”

Zhang stated that the majority stake in Sun Art would help his company boost its “New Retail” strategy integrating online and offline resources as well as other synergies. Citigroup analysts stated it will also help “fast-track sales growth … [of] fast moving consumer goods.”

Alibaba is acquiring its new stake in Sun Art “by purchasing the majority of a holding company from France’s Auchan Retail International.” Sun Art shares rose 19 percent on Monday, giving it a market capitalization of about $11.6 billion. WSJ notes that, “the company is likely to remain listed in Hong Kong.”