China-based e-commerce group Alibaba has agreed to invest HK$5.37bn ($692.2m) in China-based department store retailer Intime Retail that will also see the companies form a joint venture to develop online-to-offline (O2O) retail synergies.
The Wall Street Journal reported that the investment will involve Alibaba acquiring a 9.9% equity stake for $214m and $478m in convertible bonds that would increase its stake to 25% if converted.
The businesses previously collaborated on O2O initiatives in November, and Tmall.com, the Alibaba-owned online platform that runs online outlets for brands, will secure access to Intime’s offline inventory through the deal.
Intime sells to a relatively affluent customer base through a range of department stores and shopping centres across China, and the investment will enable Alibaba to get a foothold with high-end customers who are less used to buying products online using its Alipay payment system.
The investment is the latest in a monster-sized acquisition spree for Alibaba as it gears up for an initial public offering in the US that could raise up to $15bn.
Alibaba invested $215m in mobile communication service Tango last week, shortly after sealing a deal to acquire a controlling stake in ChinaVision Media Group for $804m. It also holds an 18% stake in internet microblogging service Weibo, which is targeting $500m in its own US-based IPO later this year.