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

Shares of Alibaba are up 2.33% to $US189.45 on Monday after the company bought a $US2.87 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 $US13.7 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 $US500 billion annually, and about 85% of those sales are made offline.

“Physical stores serve an indispensable role during the consumer journey, and should be enhanced through data-driven technology and personalised services in the digital economy,” Daniel Zhang, CEO of Alibaba, said in a statement.

Alibaba is up 113.61% this year, and recently outsold all of Black Friday, Cyber Monday and Amazon’s “Prime day” during its Singles Day Celebration.

Read more about Singles Day here.

Get the latest Alibaba stock price here.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.