China’s online retailer Company, Alibaba Group Holding Ltd. said it would combine with the founder of China’s Intime Retail (Group) Co. to take the department-store operator private, as the E-commerce firms look to increase its online supremacy into physical stores.
According to reports Alibaba’s founder, Shen Guojun, is set to invest as much as 19.8 billion Hong Kong dollars or US$2.6 billion to purchase the Hong Kong-listed department-store chain private.
The company reportedly has a 28% stake in Intime from a $692 million investment it made in 2014, its shareholding would surge to about 74% after the agreement.
Meanwhile the agreement needs endorsement from Intime shareholders and from a court in the Cayman Islands, where Intime is incorporated, an Alibaba spokeswoman said.
The statement increases Alibaba’s expedition into physical stores and underscores a push by Alibaba Executive Chairman Jack Ma to deepen links between the retailer’s online operations, brick-and-mortar stores, and logistics.
Furthermore the company, which also owns popular shopping websites Taobao and Tmall, also has a stake in Suning Commerce Group Ltd. , a major Chinese electronics physical retail chain.
Alibaba also announced more Chinese are opting to shop online through their mobile phones, offering an opportunity for physical stores to reach mobile shoppers on their devices via location services.