Chinese e-commerce giant Alibaba Group recently announced that it has invested $692 million in Chinese department store chain Intime Retail Group. The move marks Alibaba’s first foray into traditional retail sales, as Intime currently has 36 stores across China that sell high-end luxury goods. The $692 million (5.37 billion Hong Kong dollars) investment gives Alibaba as much as a 25% stake in Intime.
“We see significant opportunities to extend our e-commerce platform to physical retail, developing a more engaging, omnichannel and digitally connected shopping experience,” Daniel Zhang, Alibaba’s chief operating officer, said in a statement. “[This deal] will allow for the increased integration of online technologies at physical points of sale.”
Ultimately, the deal means Alibaba, which has run online marketplaces for 15 years and processed $240 billion in online transactions last year, will look to integrate its technologies into the physical retail space. Analysts believe the company will now look to bring more tech processes to Intime’s brick-and-mortar aisles, including facilitating smartphone payments and online searches in retail stores.
Alibaba’s investment into Intime is the company’s latest deal as it looks to diversify its portfolio in preparation for a multi-billion-dollar initial public offering (IPO) in the United States later this year. Earlier this year, the company invested $215 million in TangoMe, a Silicon Valley company that produces a messaging application, and it purchased a 60% stake in Chinese film production company ChinaVision Media. Plus, Alibaba closed on a deal last year to acquire an 18% stake in Sina Corp.’s Weibo microblog, the Chinese equivalent of Twitter.