Alibaba forms $6.9bn partnership with China’s Suning to ramp up physical presence

Chinese online retailer Alibaba is ramping up its hybrid strategy of integrating online and offline sales by forming a $6.9bn strategic partnership with Suning Commerce.

This will see Alibaba splash out $4.63bn on acquiring a 19.99 per cent stake in China’s largest consumer electronics retailer whilst for its part Suning will acquire $2.28bn of Alibaba shares, giving it a 1.1 per cent stake.

Describing the deal as a ‘… milestone that signals the further integration of digital and offline retail’ both businesses said in a statement: “This strategic collaboration will bring benefits to hundreds of millions of Chinese consumers who use Alibaba’s online platforms and Suning’s offline channels.

“By co-operating, Alibaba and Suning will be able to provide holistic and more convenient shopping experiences, as well as superior customer service to users looking to purchase online and through mobile devices.”

Describing their tie-up as a ‘new commerce model’ the pair say they will benefit from synergies in ecommerce and logistics with Suning set to open a new digital store on Alibaba’s Tmall.com site.

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