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Alibaba invests $692 million for a presence in physical retail

Alibaba invests $692 million for a presence in physical retail

Alibaba said it is acquiring a stake in department store operator Intime Retail

Alibaba Group is investing about $US692 million in retail company, Intime Retail, with the aim of setting up a joint venture that aims to provide linkages between its online and physical retail businesses in China.

The Chinese e-commerce giant will invest $US214 million in shares of Intime, besides acquiring $US478 million in convertible bonds, according to a filing by Intime to the Hong Kong stock exchange.

The equity investment will give Alibaba a 9.9 per cent share of the enhanced share capital of the company besides giving it the option to acquire a larger stake by converting its bonds into up to 18 percent of the share capital after conversion.

The investment is the latest by Alibaba, which earlier this month invested $US215 million to acquire a minority stake and a seat in the board of US mobile messaging app developer Tango. Alibaba has previously invested in expanding its presence in the US including through a $US200 million investment in Amazon.com competitor ShopRunner and Quixey, a search engine for apps.

In China, Alibaba also bought a stake last year in a large social networking site Sina Weibo and is working to acquire online mapping provider AutoNavi for $US1.1 billion.

The aim of the investment in Intime is to harness the latest Internet technologies and develop an online-to-offline, omni-channel business so as to create a highly convenient and impactful shopping experience, the companies said.

Alibaba will hold a 80 per cent stake in the joint venture with the balance held by Intime.

The investment comes ahead of Alibaba's plan for an initial public offering in the US.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com


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Tags Mergers and acquisitionsinternetbusiness issuese-commercealibabaIntime Retail

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