The latest of these occurred on November 20. Alibaba announced a 36.16% stake in Gaoxin Retail for 22.4 billion Hong Kong dollars (about 19 billion U.S. dollars).
Gao Xin retail is the supermarkets Auchan, RT-Mart operators, opened in mainland China has 446 physical stores.Ma Yun's e-commerce company has become the second largest shareholder of Gaoxin, only 0.01% less than the largest shareholder of Auchan.
Zhang Yong, CEO of Alibaba, used the term "marriage" to describe the cooperation between the two companies. "Today is the wedding ceremony. In fact, we always say that the key marriage is very important. However, we have already talked about how to live after marriage. Very specific.
At a press conference announced by Alibaba and Bailian 9 months ago, Zhang Yong used the same analogy - 'I think today is a brand new starting point and also the first stop of the new retail year. Today, we have successfully held a wedding ceremony. '
This is Alibaba following the acquisition of Suning, the acquisition of Intime, the third online retail sales of more than 10 billion investment.
Gaoxin as the largest offline retailer in China, the shares sold to Ali discount 25%
The RT-Mart and Auchan supermarkets operated by Gao Xin are mainly concentrated in the East China region with more than 50% of the stores in Jiangsu, Zhejiang, Shanghai and Anhui and more than 5.2 million in store openings, with 446 outlets exceeding Wal-Mart's 439 Home, China's largest offline retailer.
China's overall offline retail sales have slowed down year-on-year for six years in a row, with 0.1% and 0.5% YoY decrease in 2015 and 2016 respectively.
In contrast, the overall revenue and profit of Gao Xin, which owns Auchan and RT-Mart, still maintained a continuous growth rate, only a slight slowdown but better than the overall offline retail sales.
Gao Xin equity structure is complex, cross-shareholdings of several shareholders Ali actually divided into three parts.
1. Major shareholder Ji Xin internal equity transfer. Ji Xin holds a 51% stake in Gao Xin, which is Auchan and Run Tai to 51:49 ratio of investment was established in accordance with the arrangements of the transaction contract, Runtai transfer of 19.9 % Of Jixin shares to Auchan, in exchange for Auchan directly holds 9.71% stake in Xin.
2. Alibaba, through Taobao China, acquired a direct 26.03% stake in Gaoxin Retail, valued at HK $ 16.1 billion, with Runtai Group and Auchan being the vendors, including 9.71% Auchan transferred to Runtai.
3. Alibaba acquired the 19.9% stake in Gao Xin, the controlling shareholder of Gaoxin, at a price of HK $ 6.3bn at the same unit price, which is equivalent to Alibaba's acquisition of Gaoxin Retail 36.16% interest, total spending 22.4 billion Hong Kong dollars.
Gao Xin equity structure. Figure / Gao Xin acquisition announcement
At the same time as Gaoxin, Alibaba also proposed a privatization offer to Gaoxin: the transaction will be completed within 3 months, and Alibaba will need to acquire the remaining outstanding retail shares of Gaoxin if no new shareholding changes during the period, 6.5 Hong Kong dollars per share, probably to continue to contribute about 13.4 billion Hong Kong dollars.
However, this does not mean that Alibaba plans to acquire wholly-owned Gaoxin.According to the regulations, Alibaba has so far held a total of shares of Gao Xin retail has more than 35%, and Auchan and Ji Xin formed a concerted action in accordance with the Hong Kong Exchanges Provided that no matter Alibaba had intended to wholly-owned acquisition of high-Xin, it has to make an offer.
However, the remaining shareholders of Gaoxin do not seem to agree with the low offer, and the average share price of Gaoxin Retail over the past 1551 trading days was HK $ 8.37.
The strangest of this transaction is also the price.Gao Xin first largest shareholder Runtai Group and Auchan together, accepted Alibaba proposed a price of 6.5 Hong Kong dollars per share, the higher price of Xin 8.65 last Friday closing price hit Seventy-five percent off.
In general, the purchase price will be higher than the market price, especially for such a profit and the number one company in the industry.According to a 2016 CICC report, after the acquisition of listed companies in Hong Kong, the average privatization price higher than the share price 43 %.
Former private equity fund manager Wang Zeyu told The Curios Daily that even if the traditional stores are facing industry challenges, leading to profit-making supermarkets are also low valuations, but also fold into stocks is also rare, 'there may be other parties Additional terms of the agreement. 'Wang Zeyu said, but none of the parties to the transaction explained why the pricing is so low.
Too low of the offer caused the Hong Kong stock market to sell off.Gao Xin retail shares fell 20% within two days fell 9%, the market value of 10 billion Hong Kong dollar.
Xin shares fell 13% two days. Figure / snowball
In response to the sale of shares by Runtai, one Taiwanese analyst believes that the overall offline retail performance in China was poor. Last year, the closure of Shandong Branch by RT-Mart was considered as a sign of the further recession of traditional Chinese retailing and the RTOS investment e-commerce provider Niu Niu Still loss, so Runtai may take this exit the Chinese market.
Four years, 73.5 billion yuan investment, Alibaba became China's largest offline retailer
From shopping malls to supermarkets to convenience stores in the community, the physical businesses that the e-commerce operators are trying to replace have not disappeared, and some of them have become e-commerce partners and some become e-commerce affiliates.
Bhavtosh Vajpayee, a Bernstein analyst, wrote in a note to clients: 'China is experiencing a revolution in which off-line retailing is not as a resistance , The victim or the loser, and most often the partner for e-commerce. '
But this is often not peer cooperation, but by Alibaba shares or even the acquisition of partners.
In March 2014, Alibaba, which is still going to go public on the NYSE, proposed to make a strategic investment of HK $ 5.37 billion in Intime and try to get through the online and offline commercial resources so as to realize membership, payment and docking of the commodity system, that is, Now the new retail is saying one of the stories.
This is probably the first time that Intime has been widely known outside of Zhejiang Province and now operates a total of 29 department stores and 17 shopping malls in cities such as Hangzhou and Beijing.
Beijing Yintai Dahong Men shop. Figure / Johnson
In 2015, Alibaba invested 28.3 billion yuan into Suning, becoming the second largest shareholder of the latter.
Suning also spent 14 billion yuan to subscribe for new shares issued by Alibaba.This figure is less than 0.5% of Alibaba's market value of nearly 500 billion US dollars, the latter have no say in business.
After Suning to Lynx open flagship store, but also to solve Taobao, Lynx electrical reputation and logistics than Jingdong, 3C product quality uneven situation was recognized in the investment market this transaction, the two sides announced the cooperation, Ali stock Rose 2%.
♦ In 2016, Alibaba repeatedly invested or acquired offline shopping malls and supermarket chains:
♦ 2016.1 $ 150 million Newcastle A round of box-robin investment
♦ 2016.3 Investment in fresh fruit, the amount of undisclosed
♦ 2016.11 invested 2.15 billion yuan to acquire 32% equity of Sanjiang Shopping
♦ 2016.12 invested RMB 237 million to purchase 21.17% equity of Lianhua Supermarket.
In January of this year, Alibaba again upgraded its offline investment. Its consortium with Yin-Tai founder Shen Guojun proposed a privatization plan of 10 Hong Kong Dollars per share with a total investment of up to HK $ 19.8 billion.
After the deal with a premium of 50% is completed, Alibaba will raise its stake to 74% with a controlling stake, and Intime withdraws from the exchange.
However, Intime's performance was inferior to that of Gaoxin, and Intime's department store revenue growth in 2016 was 1.3%, less than one-fifth of that in supermarkets.
After the pile of acquisitions, investment is completed, Alibaba has become China's largest offline retailer.
The world's three largest retail companies have to do both online and offline at the same time
The three largest retailers in the world with the largest market cap are Amazon, Alibaba and Wal-Mart, all of which are listed in the United States with market cap of 547.7 billion U.S. dollars, 486.2 billion U.S. dollars and 289.4 billion U.S. dollars respectively.
All three companies operate in different ways, but today are doing both online and offline retail.
In the past few years, Amazon has made one-day delivery, one-hour delivery, and an attempt to build warehousing logistics in the urban areas, trying to enter the fresh market by using traditional e-commerce delivery methods.
In July, Amazon paid $ 17.7 billion for Whole Foods, Amazon's biggest acquisition to date and the fourth-largest deal in U.S. retail history, with Amazon, a unit of more than 460 Whole Foods stores, Fifth largest grocery retailer.
At the same time, Amazon also started a physical bookstore business, so far opened 12, the vast majority are opened this year.At present the nationwide chain of bookstores in the United States fell to only one.
Fresh and bookstores, Amazon.com, which sells $ 27 million in September to Shoppers Stop, an offline retail company in India, opened 83 stores in 38 cities in India and plans to open a Retail Experience Center in the Shoppers Stop mall Online fashion products, the latter will be the agent of more than 400 brand products on the Amazon website for sale.
The rise of Amazon almost happened with the decline of Wal-Mart.
Wal-Mart, the world's third-largest retailer by market value, is number one in the world with sales of nearly $ 500 billion, and has changed the spending preferences of a country by opening supermarkets across the United States lifestyle.
Wal-Mart began its e-commerce efforts by first establishing its Walmart Labs lab in Silicon Valley through acquisitions in 2011. There are early executives from eBay and Amazon.
Wal-Mart's e-commerce business slowed down and the company temporarily suspended its online investment. On May 19, 2015, Wal-Mart announced its earnings, both revenue and profits slipped, and its e-commerce revenue growth slowed to 17%, which led to a drop of more than 4 %.
After the second half of 2016, Wal-Mart has started to increase its investment in the e-commerce business to tie its e-commerce business with its share price performance.
It spent $ 3 billion acquiring Jet.com and letting Mark.com, the founder of Jet.com, take over Wal-Mart's ecommerce business. Mark Lowell started Diapers.com, a maternal and child e-commerce platform in 2005, 540 million acquisition of it to end the price war.
Jet.com is Wal-Mart's largest single e-commerce acquisition, after which it spent $ 70 million on shoe-maker Shoebuy, $ 51 million on Moosejaw for outdoor apparel, $ 80 million on ModCloth for women's e-commerce platform, and 310 million acquisition of online men's brand Bonobos.
These deals take place in 2016-2017.
Since Wal-Mart's entry into China started its business from No. 1 in 2011, Wal-Mart invested RMB 4 billion in June 2016 and increased its shareholding to 12.1% in February this year, making it the third-largest shareholder in Jingdong Big shareholder.
Wal-Mart's Sam's Club now has an official flagship store on its Jingdong platform, while the Wal-Mart has access to Jingdong's home delivery service, Jingdong's 2-hour supermarket delivery service.
They may not know exactly how to make the online and offline integration, but they must do it
Now the largest number of retail companies mergers and acquisitions, the scale of investment are large, have also done some online and offline attempts.
Amazon Amazon unmanned convenience store such as Amazon Check with the application, artificial intelligence instead of sales staff to reduce operating costs.
Its physical bookstore based on Amazon online shop data book selection, store book prices are also consistent with the online.
While making use of the new technologies, the convenience store and 12 bookshops currently open are located in popular shopping areas with a natural flow of people, but most bookstores are opened this year and are not yet sure it is as low as online The price can afford high store input.
As for the newly acquired Wholefoods, although the promotion has been done, but too little time can not see anything.
Wal-Mart opened up more Neighborhood Markets, mainly selling necessities such as toothpaste and toilet paper, and shutting down big supermarkets that are far away from users and require big purchases by car, because the business of these big stores was handed over to it E-commerce sector.
The same price online and offline, to the store to pick up Wal-Mart have done before.
These businesses sound reasonable, online and offline the same price will be able to retain customers in the store, so that they go directly to take the goods, but the actual operation is not easy. Wal-Mart has now given up online and offline the same price this month Wal-Mart Start hiking some of the price online - such as toothbrush, dog food, macaroni, to encourage people to shop consumption, because these goods low value, light weight, shipping profit than Wal-Mart sales are still higher.
Alibaba is doing a bit more. These fresh supermarkets are both stores and home-from-home warehouses that encourage incoming customers to download apps for later delivery at home.
Intime, which was acquired by Alibaba, offered the same price as online and offline, but sales dropped. Intime sales for the same period in China in FY15 grew by only 0.5%, reaching -4.1% in the first half of 2016. Opening More than half of the 43 stores over a year have seen their sales fall.
Suning, which has already been with Alibaba for two years, has so far failed to guarantee the same online and offline prices. The sales staff in the store would encourage you to bargain with them and give you a price that might be cheaper than online.
However, Alibaba investment in the transformation of offline stores did not slow down.Double 11 during double 11, from no shopping to brush face to makeup and mirror mirror, emphasizing the 'new retail' Alibaba almost all new domestic and foreign retail technology Have tried all over.
There is growing pressure here, and no matter which one of these e-commerce or physical giants, the original markets tend to become saturated and grow slower and slower.
Obviously, although the electricity supplier has taken away the massive offline market, the offline market will not disappear completely.
According to data released by China's Ministry of Commerce and Ministry of Industry and Information Technology, the growth rate of online shopping in China has declined for four years in a row. By June this year, a total of 500 million Internet users in China had bought online, down from 20% four years ago To 10%.
5.5 trillion online shopping sales accounted for only 19% of China's overall retail market in 2016. At the same time, China's online shopping retail sales growth has dropped for three consecutive years.
The contrast is even greater in the United States, with online sales accounting for only 9% of overall retail sales in 2013-2017, according to a survey by TABS Analytics, a consumer product research firm, The company made a big investment, but the number of frequent online shoppers was still only 4.5%, up slightly from 4.2% four years ago.
Not all acquisitions are 1 + 1 = 2, most markets will be less than 2. But retail giants are no longer only able to do it online and offline for larger markets and future growth One.