Alibaba Group, Chinese e-commerce company renowned for providing consumer-to-consumer, business-to-consumer and business-to-business sales services via web portal, is spending $4.6 billion to buy 19.99-percent stake in Shenzhen-listed Suning Commerce.
Suning Appliance Company Ltd., one of the largest privately owned retailers in China, is also investing $2.3 billion in Alibaba and will subscribe for nearly 27.8 million newly issued shares. The strategic alliance between Suning and Alibaba will not only bring threat to other companies dealing in business-to-customer sales, but also help in creating synergies in areas like e-commerce and logistics.
This alliance between the two leading companies is to fight back the sudden growth viewed by JD.com. JD.com spokesperson, directly denied the deal as threat to the company as according to them ‘superior service is a differentiator that is hard to duplicate.’
According to Alibaba, the strategic collaboration will bring the online and offline retailers closer together, providing more holistic and convenient shopping experience. Moreover, it will also improve the customer service to shoppers buying online through desktop or mobile devices.