Alibaba-controlled hypermarket operator Sun Art appoints new CEO amid restructuring and rising competition

Sun Art Retail Group, controlled by Alibaba Group Holding, has appointed a new chief executive as the e-commerce giant continues to consolidate its retail assets amid a restructuring and rising market competition.

Hong Kong-listed Sun Art, a hypermarket business, said in a stock exchange filing on Tuesday that Lin Xiaohai, fomer chief executive officer and executive director of the company, has been moved to another position with Alibaba. Shen Hui, a former senior executive at French supermarket operator Auchan Retail, a former affiliated brand under Sun Art, has taken over the CEO role since Wednesday.

Alibaba acquired a controlling stake in Sun Art in 2020 from the billionaire Mulliez family, paying HK$28 billion to double its effective stake in the Hong Kong-listed group to 72 per cent. The deal was seen as a move to boost the e-commerce giant’s stranglehold in the offline retailing sector as the Covid-19 pandemic intensified the integration of online and offline shopping.

The executive reshuffle comes as Alibaba, which owns the South China Morning Post, continues to adjust its offline retail businesses in the wake of a sweeping restructuring announced a year ago.

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Alibaba is currently focused on its two core businesses, e-commerce and cloud computing, with noncore operations – such as traditional physical retailing – up for sale, according to company executives on a conference call in February.

Sun Art is the largest hypermarket operator in China, operating under the brands of RT-Mart, RT-Super and M-Club. As of September 2023, Sun Art had a total of 485 hypermarkets, 19 superstores and one membership store in China, covering a total area of around 13.79 million square meters across 211 cities.

The executive reshuffle is the latest in a series of shake-ups at Alibaba’s stock of offline retail businesses, which include Freshippo, supermarket chain Sun Art and department store operator Intime Retail.

Last November, the company announced it was putting on hold its listing plan for supermarket chain Freshippo, citing poor “market conditions”. It also terminated the spin-off of its cloud business and this week cancelled the planned IPO of its logistics unit Cainiao.

The group is also set to suspend operations at Ling Shou Tong, a nine-year-old online platform that helps mom-and-pop shops source their products, by the end of this month.