E-commerce giant Alibaba Group will invest about 28.3 billion yuan (US$4.63 billion) for a 19.99 percent stake in Chinese electronics retailer Suning Commerce Group (002024.CN).
Upon completion of the deal, Alibaba will emerge as Suning’s second-largest shareholder, according to an announcement Monday.
Meanwhile, Suning will spend up to 14 billion yuan to buy up to 27.8 million Alibaba shares in a private placement deal.
The investment could give Suning about 1.1 percent interest in the e-commerce titan.
The strategic alliance between the two firms aims to integrate Alibaba’s online platforms and Suning’s offline channels, build synergies in e-commerce, logistics and incremental business, a statement said.
Under the collaboration, Suning will open a flagship store on Tmall.com, focusing on consumer electronics, home appliances and baby products. It will also become a partner of Alibaba’s logistics arm Cainiao, making it a nationwide logistics network covering over 90 percent of China’s counties.
Suning currently has over 1,600 physical retail stores in 289 cities across China. Its logistics unit owns 4.52 million square meters of warehouses, four air cargo hubs, 12 automated sorting centers, 660 city delivery centers and more than 10,000 express stations.
“This collaboration signals a new trend in the Internet age: Strengthening China’s traditional industries by leveraging the power of Internet,” Suning chairman Zhang Jindong said in the statement.
“It will also help transform China’s manufacturing industry and broaden the global horizons of Chinese brands.”
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