Alibaba, China’s eCommerce giant, will be buying a 20% stake in electronics retailer Suning, according to a recent New York Times article. Alibaba will pay about $4.6 billion dollars for the company stake.
Suning is a Chinese retailer that sells consumer electronics and has been overpowered by online competition in recent years.
Daniel Zhang, Alibaba’s chief executive, says they will use Suning’s retail outlets to sell groceries and other items that Chinese consumers can access immediately, which is outside Suning’s core offerings.
According to the article, “Alibaba said the move was another step toward securing its distribution network across China.”
Alibaba’s extreme growth has outpaced the China’s delivery infrastructure system. The move to purchase stake of Suning was a strategic move to have access to Suning’s sophisticated logistical operations that stretch across China.
Alibaba’s competitors, Tencent and Baidu, have also promised similar investments plans.
To read the entire New York Times article, see: Alibaba to Buy 20% Stake in Electronics Retailer Suning
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