Alibaba Group Holding Ltd, which is preparing to list on the US market, said yesterday that it will invest HK$5.37 billion (US$692 million) in a Chinese department store operator to expand into the O2O (online to offline) business.
Alibaba will own 9.9 percent of Hong Kong-listed Intime Retail (Group) Co and US$478 million of its convertible bonds, which when converted into shares in three years will boost Alibaba’s stake in the retailer to more than 25 percent.
Alibaba will own 80 percent of an online shopping joint venture to be set up, whose business will also cover shopping malls, department stores and supermarkets in China. Intime will hold the remaining stake in the venture.
Intime has 36 stores nationwide with 1.5 million registered users. Both sides will cooperate and share information on payment and database to maximize the benefits and convenience of online shopping to customers.
The latest investment comes as Alibaba prepares for its US initial public offering that is set to be the biggest-ever technology listing, surpassing Facebook Inc’s US$16 billion listing in 2012.
In recent months, Alibaba has spent more than US$2.7 billion to expand into media and chat services by investing in Sina Weibo, and also in AutoNavi which offers mapping services for iPhone in China.