Alibaba is spending $3.6bn to buy a controlling stake in one of China’s top supermarket operators as it doubles down on grocery delivery, a key growth engine for the ecommerce group during the pandemic. Alibaba is purchasing the shares from France’s Auchan Retail International.

Grocery and fresh produce delivery have become key revenue drivers for China’s ecommerce giants including Meituan, Pinduoduo and JD.com as shoppers avoid physical stores due to the coronavirus outbreak. Last year, Sun Art was the first traditional grocer in China to make its online delivery business profitable, according to Bernstein Research.

“Alibaba’s core ecommerce business is under pressure; its profit hasn’t grown much this year, [and] this will help,” said Li Chengdong of ecommerce think-tank Haitun.

Alibaba to pay $3.6bn to take control of Chinese supermarket chain Sun Art