Alibaba in new omnichannel push with retail deal

New York -- Alibaba Group Holding Ltd. has entered into its biggest deal ever — and this one is in the brick-and-mortar arena.



The Internet giant has invested approximately $4.63 billion in Chinese consumer electronics retailer Suning, which operates more than 1,600 stores across 289 cities in China. The investment gives Alibaba a 19.9% stake, making it the second largest shareholder in the company.



In return, Suning will invest up to $2.28 billion to subscribe to new shares of Alibaba.



“Over the past two decades, e-commerce has become an inextricable part of the lives of Chinese consumers, and this new alliance brings forth a new commerce model that fully integrates online and offline,” Alibaba founder Jack Ma said in a statement.



Suning will open a store on Alibaba’s online mall, Tmall. Consumers will be able to purchase items online, and pick them up or return them at a brick-and-mortar Suning store.



The two companies said that they would work to make use of Suning’s stores around the country to offer instant products and services to the millions of Chinese who use Alibaba’s mobile applications. The companies will also combine their logistics units.



“Consumers will be able to have a physical experience with the product in store, while at the same time being able to operate other areas — such as ordering and payment — through their own mobile device,” the companies stated.



In March 2014, Alibaba agreed to invest $692 million in Chinese department store operator.