Aldi's arch rival Schwarz Group is investigating setting up Kaufland stores in Australia.
An entry into Australia would raise eyebrows as the secretive and privately owned Kaufland has only expanded into eastern Europe.
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Is Australia ready for Kaufland?
Germany's Kaufland could rock the retail world if the 'hypermarket' giant decides to set up stores in Australia.
There are 1240 Kaufland stores across Germany, Poland, Czech Republic, Slovakia, Croatia, Romania and Bulgaria.
Kaufland is a "hypermarket", or a one-stop-shop selling groceries and general merchandise such as bikes and car maintenance supplies. Known for its aggressive pricing, it sells brands and its own discount label.
The confirmation follows Fairfax Media revelations that the giant retail group led up by German billionaire Dieter Schwarz recently sought to trademark the word "Kaufland" in Australia.
The Australian trademark application was lodged in July and covers everything from alcohol to tobacco, pharmacy, musical instruments, sports equipment, garden, vehicles, financial services and insurance.
A spokeswoman for Kaufland told Fairfax Media: "We are a growth-oriented corporation assessing our expansion possibilities in existing and potential markets on a regular basis.
"Thereby we are presently analysing the chances of entering the Australian market. This is why we are currently conducting a feasibility study.
"Only after having completed those studies, we will be able to come to a decision regarding a possible market entry.
"If the analysis is regarded as being viable, we will be starting a pre-operational phase of securing developments and properties.
"We are convinced that Kaufland with its attractive business model is offering an interesting alternative for its customers in various countries."
Kaufland is the sister company of discounter Lidl, which has also been applying for trademarks in Australia this year but has denied to European press that an Australian Lidl launch is in the works.
Combined, the Schwarz Group is the the third-biggest grocer in Germany, with €34.5 billion ($49.4 billion) in annual sales, compared with Aldi Group's €27.8 billion.
Lidl and Kaufland operate independently from each other.
The spokeswoman declined to comment on whether a Kaufland entry to Australia would preclude Lidl from launching.
Kaufland staff were reportedly briefed on Australia recently.
"Numerous options had been evaluated, staff were told. Eventually the company opted for Australia. But Kaufland dismissed suggestions that the first stores will be opened as soon as 2020," the Heilbronner Stimme newspaper reported.
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