Chinese Alibaba is to invest four billion euro in Suning Commerce Group, also from China, in exchange for 19.99 % of its shares. On the other hand, the electronics chain will buy two billion euros' worth of shares in Alibaba.
Online and offline integration
The deal's goal is to get a collaboration going between both companies in the fields of logistics and online sales. Alibaba wants to get Suning products delivered within a 2-hour period. "This new alliance will introduce a new business model, one that completely integrates online and offline", Alibaba CEO Jack Ma said regarding the investment.
Suning has more than 1,600 stores in 289 Chinese cities and sells household appliances, books and baby products. Trailing chairman Zhang Jindong, Alibaba will become the company's second largest shareholder. Suning's biggest competitor, Gome Electrical Appliances, instantly grew 50 % after a recent acquisition and currently has 1,714 stores in 436 cities.