Chinese Internet giant Alibaba (阿里巴巴) is to pay 28.3 billion yuan (US$4.6 billion) for a nearly 20 percent stake in consumer electronics retailer Suning Appliance Co (蘇寧電器), the two companies said in a statement yesterday.
At the same time, the Chinese shopping chain is to invest up to 14 billion yuan for just over a 1 percent stake in Alibaba, the statement said, bringing the total value of the deal to nearly US$7 billion.
It will make Alibaba the second-largest shareholder in Suning, the statement said, adding that the two firms would embark on a “strategic collaboration” that “signals the further integration of digital and offline retail.”
Suning is one of China’s biggest consumer electronics retailers, while Alibaba’s Tmall.com Web site is believed to command more than half the Chinese market for business-to-consumer transactions. Its Taobao.com (淘寶) platform holds more than 90 percent of the nation’s consumer-to-consumer market.
“Over the past two decades, e-commerce has become an inextricable part of the lives of Chinese consumers, and this new alliance brings forth a new commerce model that fully integrates online and offline,” Alibaba founder and executive chairman Jack Ma (馬雲) said.
Suning chairman Zhang Jindong (張近東) said the deal would “help transform China’s manufacturing industry and broaden the global horizons of Chinese brands.”
It is the latest in a string of acquisitions by Alibaba as Ma seeks to diversify the huge New York-listed company, which is facing domestic competition from Internet giants Baidu (百度) and Tencent (騰訊), and remains relatively unknown outside China.
Two weeks ago, Alibaba announced it would invest US$1 billion in its cloud computing arm to expand its international presence. In June, it launched an Internet bank aimed at serving small businesses which often struggle to obtain credit from larger banks.
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