Alibaba invests another $1.3 billion into its offline retail strategy

Fundings and Exits



Alibaba has furthered its physical retail footprint after it invested another billion dollars into projects to develop its so-called “new retail” strategy which combines online and offline.

The Chinese firm, the dominant e-commerce player in its country, gobbled up a 15 percent stake in Beijing Easyhome Furnishing for RMB 5.45 billion, or around $867 million, and pumped $486 million into a big data retail firm in two deals announced over the weekend.

Beijing Easyhome operates 223 physical home furnishing and DIY-style stores across 29 provinces in China, which it claims makes it the country’s second largest in its field.

The second outlay is for a 38 percent stake in Shiji Retail Information Technology, Reuters reports, which works with hotels and high-street retailers on data-related services to increase customer footfall, grow engagement and more.

The Beijing Easyhome deal is the fourth major investment that the e-commerce giant has made in a brick and mortar chain. Last year, it bought major holdings in hypermarket firm Sun Art ($2.9 billion) and shopping mall operator InTime ($2.6 billion). Prior to that, it invested in high-profile electronics retailer Suning ($4.6 billion) having bought an initial stake in InTime back in 2014.

The company has also made its own move independently through its Hema supermarket chain, which was one of the early adopters of cashier-less checkouts.

Alibaba’s vision for the future of retail allows customers to shop in-store while using the benefits of mobile. For example, testing products in-person before buying, or going to a store if there are issues with their purchase later, etc.

Alibaba’s newest investors come just before Chinese New Year, and a little over week after it spent $500 million backing two of India’s most prominent on-demand startups.

The Chinese firm bought around one-third of e-grocer Big Basket for $300 million to become its largest shareholder and amp up its war with Amazon in India. It also backed food delivery platform Zomato with a $200 million investment made via its Ant Financial subsidiary.

Featured Image: Xinhua/Wang Dingchang via Getty Images





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