Retail giant Alibaba Group Holding has sunk $692m into Intime Retail, forming a joint venture to combine the Chinese firms’ resources to fuse online and offline shopping.
Under the deal, the online retailer is also planning to buy a 9.9% equity stake in Intime Retail worth about $214m.
The retail firm will also purchase $478m of convertible bonds that would offer it a 26.1% stake in the department store operator following the conversion of the bonds into shares in next three years.
With the strategic investment, Alibaba Group and Intime Retail will integrate their membership systems and payment systems as well as connect the product systems.
The integration is expected to allow the companies to develop an infrastructure for simplifying online-to-offline (O2O) commerce transactions, membership marketing, and service.
Alibaba Group COO Daniel Zhang said commerce would grow increasingly electronic-based in the future, while the offline economy and the internet economy will complement each other based on technologies such as big data and cloud computing.
"Alibaba Group and Intime Retail cooperate in the hope of building up an open infrastructure to eventually help all department stores, shopping centers, and other retail formats achieve perfect integration of the real economy and the internet economy," Zhang added.
Intime Retail operated 36 stores, including 28 department stores and 8 shopping malls, at the end of last year.
