Alibaba goes back to the future with $692m departments store investment

Chinese e-commerce giant Alibaba is to move toward bricks and mortar retailing after investing $692m in a local department store operator.

Alibab will purchase $214m of shares of Intime Retail as well as purchasing a further $478m of convertible bonds in the group, giving Alibaba a 26.1 per cent stake in the retailer when these bonds convert to shares.

Both firms now plan to form a joint venture developing online-to-offline business in shopping malls, department stores and supermarkets throughout China, tapping into burgeoning smartphone usage.

The move is being heralded as an attempt to marry the convenience of web browsing with the benefits of more traditional browsing and comes ahead of the group’s planned IPO in New York, eagerly anticipated as the largest ever technology listing and surpassing even Facebook’s $16bn mega-IPO.

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