Alibaba Partners to Take Online Retail Offline
Alibaba’s initiative to rule payments is coming full circle.
The Chinese Internet company, with its fingers in everything from online retail, to e-commerce, to social media, is spending $692 million to further its presence in the real world.
The giant is aiming to purchase 25% of Intime Retail (Group) Company Limited, an investment holding company that manages malls, department stores, and property in China.
The investment will allow Alibaba to partner with Intime Retail (Group) Co. to provide a retail outlet for its online-to-offline payment services.
Alibaba’s payment arm, Alipay, has a digital wallet for smartphones aptly named Alipay Wallet.
It’s an opportunity for Alibaba to capitalize on heavy smartphone users who tend to be wealthier and can purchase goods at Intime Retail (Group) Co.’s more than 25 shopping malls and retail locations that are host to upscale brands.
As mobile payment providers fight to get merchants and retailers to adopt their solutions, Alibaba is smartly skipping the battle entirely with some intrepid deal making (and a lot of cash).
Alibaba has a sizable hold on China’s e-commerce market, with more than 45 percent in 2013, though rivals like Tencent have been chipping away at the market leader.
Alibaba is also preparing an initial public offering later this year, which many analysts project to be the largest from a tech company since Facebook.