Alibaba has made a big investment in one of China’s biggest furniture and home improvement retailers, according to a filing with the Shanghai Stock Exchange.
The e-commerce titan has bought nearly RMB 4.4 billion (USD 633 million) in convertible bonds from Red Star Macalline, which upon conversion will give Alibaba an approximately 10% stake. In addition, Alibaba has acquired a 3.7% stake in Red Star Macalline through the latter’s publicly traded shares on the Hong Kong stock exchange.
One of China’s leading home improvement and furniture retail companies, Red Star Macalline operated more than 250 stores across 29 (out of 34) provinces and 177 cities in China in 2017. It carries 18,000 brands.
The two companies will cooperate on selling furniture and home products online as well as on revitalizing department stores and shopping malls, with Alibaba providing technology support aligned with its “new retail” vision that integrates digital and physical channels.
Intriguingly, Red Star Macalline and Tencent had announced a partnership in October with Tencent providing digital marketing and technical support. It’s not immediately clear how this tie-up will be impacted by Alibaba taking a seat at the table.
Editor: Nadine Freischlad