Alibaba is set to invest US$4.6bn into the Chinese electronics retailer Suning, giving Alibaba a 19.99% stake in the company. The deal will provide Alibaba with a bricks-and-mortar network of distribution centers and delivery stations to add to its Cainiao logistics branch.
Suning will open an online flagship store on the Alibaba platform and has also committed to buying a 1.1% stake in the online retailer for around $2.3B, according toThe Wall Street Journal.
Alibaba has already invested around $692 million into Intime Retail, a Chinese luxury brand department store operator. The deal occurred last March as Alibaba began to extend its offline presence with the help of physical stores and the Alipay wallet technology.
Last week, Alibaba’s online competitor JD.com (JD – Get Report) bought a 10% stake in Chinese supermarket chain Yonghui Superstores for around $700 million. Alibaba shares have dropped around 24% this year despite its increasingly expanding revenues. The online retailer will report first quarter earnings on Wednesday.