Auchan packs up and leaves China after having tried for twenty years to conquer the Chinese market, dominated by the presence of Alibaba, the e-commerce giant which over the years has managed to establish itself in sectors such as electronic commerce, payment and trading platforms, engines research and services for cloud computing.
Through a statement, the French distribution group announced the sale of its Chinese subsidiary SunArt to Alibaba. The operation, whose value amounts to 3,6 billion dollars (about 3 billion euros), marks the definitive exit of the transalpine giant from China.
“Three years after signing an alliance” and having “jointly acknowledged the specificity of the Chinese market, Auchan Retail accepted Alibaba's proposal to buy back all of its stake in SunArt (484 hypermarkets, 150.000 employees).”
The company therefore admits what can effectively be described as a defeat, selling 36% of Chinese supermarkets to Alibaba. A further 36% had already been sold 3 years ago again to the giant led by Jack Ma. At the time the agreed price was 2,8 billion dollars.
The sale puts an end to Auchan's "Chinese dream". which until recently hoped instead to be able to conquer a slice of the market thanks to the alliance with the undisputed leader of the Chinese market. With this operation, the French group points out, Auchan Retail "will thus have the financial means" to reduce the financial leverage", seize new opportunities and "develop in new countries". Simply put, the resources deriving from the sale will be used to settle the debts, which have also increased due to the pandemic.
Alibaba, for its part, is celebrating yet another "big shot". In fact, the operation comes at a time when, due to the Covid emergency, online sales of fresh products have grown dramatically. The acquisition will therefore allow the company to further consolidate its leadership in the local large-scale retail market. A record that not even Amazon and the other western giants have managed to scratch.
