Alibaba Group Holding Ltd said on Monday it will invest $3.6 billion to gain a controlling stake in hypermarket operator Sun Art Retail Group Ltd, upping the ante in China's fierce retail market.

The ecommerce giant, which already owns 21 percent of Sun Art through a unit, will raise its stake to roughly 72 percent through the acquisition of a similar stake in A-RT Retail Holdings, which owns 51 percent of Sun Art.

The deal signals the intention of Alibaba to try to dominate one of Chinese e-commerce's largest untapped frontiers, as the traditional e-commerce faces slower growth and intensifying competition from rivals like JD and Pinduoduo.

"As the COVID-19 pandemic is accelerating the digitalization of consumer lifestyles and enterprise operations, this commitment to Sun Art serves to strengthen our New Retail vision and serve more consumers with a fully integrated experience," Alibaba Chairman and CEO Daniel Zhang said in a statement.

The foray into brick-and-mortar retail is exemplified by its building of supermarket chain Freshippo, which it doubles as an online delivery service. It also teamed up with mom-and-pop convenience stores to offer technology and data analytics services.