Chinese online retailer JD.com said on Friday that it has bought a 10-percent stake in domestic supermarket Yonghui Superstores for 4.31 billion yuan (around 700 million U.S. dollars).
The deal is part of the online retailer's campaign to leverage existing networks of bricks-and-mortar stores to boost its supply chain and diversify its offline offerings, as competition with rival Alibaba, which runs leading Chinese online marketplaces Taobao and Tmall.com, intensifies.
Founded in 1998, Yonghui Superstores currently run 364 supermarkets on the Chinese mainland, with plans for 179 more this year.
Profit at the supermarket chain rose 16.3 percent during the first half this year to 527 million yuan on top of 20.8 billion in revenue.
After the investment, JD.com is entitled to appoint two directors to the board of Yonghui. Shares in the supermarket have been suspended from trading at the Shanghai Stock Exchange since July 31.
JD.com's second quarter results released on Friday showed that total transactions during the quarter exceeded 100 billion yuan for the first time, making it the fifth consecutive month the value of products sold on the online platform recorded year-on-year growth over 80 percent.
The company's net revenues also topped estimates with a 61 percent rise to 45.9 billion yuan, but JD.com expects revenue growth to moderate between 49 percent and 54 in the third quarter.
The strong performance came as a result of company's growing shift toward mobile shopping and more cooperation with overseas brands to expand imported offerings to Chinese shoppers.
Shares in JD.com rose nearly 5 percent to 34.4 U.S. dollars on Friday morning trading on NASDAQ. The company has risen 60 percent since it was floated in May 2014 and is now a component of the NASDAQ-100 Index and the NASDAQ-100 Equal Weighted Index.
Chinese Online Retailer JD.com