Alibaba Dishes Out $692 Million for 35% Stake in Intime Retail.
Online shipping may have changed the retailing game as we know it, but it seems that there a been a lot of talk about trying to bridge the gap between online and traditional shopping. Its possible that retailers have begun to realize that there are benefits in maintaining both, and that they shouldn’t focus on a single one over the other.
Chinese e-commerce Alibaba seems to have come to that conclusion, and it looks like they want to create a similar system of their online to the offline world. It has recently decided to do some huge investments in Chinese department store operator Intime.
Alibaba has decided to put down a total amount of 5.37 Hong Kong cash into Intime, this was revealed in a blog post published on Sunday. The company will initially take a 9.9 percent claim on Intime for $214 million. it will also gain $478 million in convertible bonds, eventually giving Alibaba at least a 25% claim on Intime.
The total amount that Alibaba will be receiving in this investment will be equaling around $692 million U.S. dollars.
From what can be gathered from the press release, the two companies will “integrate the advantages of resources, construct an open future commercial infrastructure system online and offline, and open the whole society to help promote commercial entities bi-directional integration with the Internet economy.”
Furthermore, they have also decided to create a joint venture company that will help develop online-to-offline business in shopping malls, department stores and supermarkets around China,
It’s not that hard to conclude on why Alibaba would decide to take Intime as their retailing partner, With the considerable size of the company. As of last year, Intime as of now operates 36 stores, including 28 department stores and eight shopping centers.
Behind the Move.
Alibaba themselves have also been going through a bit of a surge of purchasing ever since the company had began to process for eventually going public within the U.S. after it could not reach a deal with regulators in Hong Kong. The company has been said to raise a possible up to $18 billion in that IPO
During a much earlier time within this month, Alibaba had invested over $280 million onto the mobile video chat application Tango. Micheal Zeisser from Alibaba had also join onto Tango’s Board of Directors.
This recent move will allow Alibaba to compete against their currently biggest competitor in China, Tencent, the company that’s behind mobile message giant know as WeChat. This investment came right after Tencent had taken a 15% claim on online company JD.com. a move that was made to possible strike a big blow against Alibaba due to JD being the second biggest e-commerce company in China.
Read Next: Alibaba Invests $280M In Chat App Tango.