(Bloomberg)Alibaba Group Holding Ltd. will spend more than 2 billion yuan ($290 million) buying about a third of Sanjiang Shopping Club Co., picking up a slice of a regional Chinese discount supermarket chain with more than a million members.

Shares of Sanjiang surged by its daily 10% limit on Monday, giving the Ningbo-based company a market value of about $830 million.

China’s largest e-commerce company will hold about 32% of Sanjiang, it said in a filing. It will buy 1.52 billion yuan of new shares, 438.6 million yuan of stock from existing holders, and 188 million yuan of convertible bonds via a private sale. If converted, the bonds would account for 3% of equity.

The deal marks Alibaba’s latest acquisition of physical retail, as it tries to revamp traditional offline and online models. Billionaire co-founder Jack Ma’s goal is to replace distributors and middlemen and let stores buy directly from suppliers based on real-time demand and inventory. Sanjiang, a local take on Wal-Mart Stores Inc.’s Sam’s Club that sells groceries at discounted prices, operates about 160 stores scattered across the prosperous eastern province of Zhejiang.

“Sanjiang shopping has an extensive offline network and experience in running retail stores,” the companies said in the filing. The two companies will work in procurement and logistics, and integrate business lines.

Alibaba doesn’t plan on any additional stake purchases in the next 12 months, Sanjiang said in a stock exchange filing. The convertible bonds can be converted to Sanjiang shares six months after issuance.

Alibaba has invested in physical retailincluding in Suning Commerce Group Co. and Intime Retail Group Co.to flesh out its online shopping offerings, open up new sales channels and improve its logistics network.