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Sun Art inks retail deal with Alibaba unit Shanghai Hema

A unit of Hong Kong-listed Chinese hypermarket operator Sun Art Retail Group Ltd. entered business agreements with Alibaba Group Holding Ltd.'s food retail subsidiary Shanghai Hema, according to a Jan. 15 Hong Kong Stock Exchange filing.

Under the deal, Sun Art's Shanghai Runhe will adopt Shanghai Hema's "Hema Fresh" grocery business model for new Hema stores planned in the Chinese provinces of Hainan, Heilongjiang, Jilin and Liaoning. Shanghai Runhe will also integrate software systems into the stores, for which Shanghai Hema will provide maintenance support.

In addition, Shanghai Hema will manage delivery services for products sold through the Hema app, and Alibaba-affiliated mobile payment platform Alipay will be used in the stores.

The new agreement continues to build on a partnership forged in November 2017, when Alibaba agreed to acquire a 36.16% stake in Sun Art for HK$22.4 billion.

Shortly after that deal was announced, Sun Art and its subsidiaries Auchan China and RT Mart China entered into a tie-up with Alibaba unit Alibaba Zetai. That agreement, signed in December 2017, would see Sun Art adopt the "Taobao Daojia" business model across its stores, integrating internet technologies and traffic from Alibaba's Taobao shopping platform to boost efficiency.

The relationship between Sun Art and Alibaba expanded again in March 2018 through a deal signed between Taobao (China) Software Co. Ltd., Auchan China and RT Mart China. That deal also brought the Taobao Daojia model to Auchan and RT Mart stores, including software, hardware and delivery services.