A consortium led by Chinese e-commerce giant Alibaba Group Holding Limited BABA has invested $400 million in the consumer retail arm of Vietnamese conglomerate Masan Group Corp.
What Happened: Masan Group said in a statement that the consortium, which includes Alibaba and Baring Private Equity Asia, acquired a 5.5% stake in the CrownX, Masan’s retail arm.
The deal implies a pre-money valuation of $6.9 billion for the CrownX. Masan will own 80.2% of the retail arm following the consortium’s investment.
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Grocery, which is of essential daily use, accounts for 50% of Vietnam’s retail market and 25% of consumer wallet share, but online penetration is still nascent, Masan noted. The company added that its immediate priority is to modernize Vietnam’s grocery market.
Masan is also in advanced talks with other investors regarding a further investment of $300 million to $400 million into the CrownX.
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Why It Matters: The deal will enable Alibaba to expand its presence in Southeast Asia further, following its investment in Singapore-based e-commerce firm Lazada in 2016.
Alibaba’s investment in Vietnam also comes amid increased regulatory scrutiny of the company in China since last year.
Alibaba, the Jack Ma-co-founded company, was hit with a record $2.8 billion fine in April over abusing its dominant maker position in the country.
Price Action: Alibaba Group shares closed 0.7% higher in Monday’s trading at $211.05.
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