Alibaba Spruces Up Retail Portfolio With Home Improvement Chain Investment

E-commerce giant Alibaba Group Holding Ltd. said on Sunday it will pay 5.45 billion yuan ($865 million) for 15% of one of China’s leading traditional home improvement chains, extending its strategy of combining online and offline retailing.

The investment in Beijing Easyhome Furnishing Chain Store Group Co. Ltd “underscores Alibaba’s commitment to furthering the new retail strategy by taking it into new sectors and driving the seamless convergence of online and offline retail experience,” Alibaba said in a statement.

Easyhome operates 223 stores in 29 provinces and autonomous regions across China, and posted sales of over 60 billion yuan in 2017. Alibaba said Easyhome would use the new cash infusion and broader partnership to aid in the chain’s own digital transformation.

“The investment is in addition to the success that Alibaba has already achieved in industries of electronics and home appliance, fast-moving consumer goods and grocery, fashion and department stores, and catering,” Alibaba said in a statement. “Alibaba’s new retail is fast becoming an indispensable component of people’s daily life.”

The move marks the latest purchase of a traditional retailing asset by Alibaba, as it pursues its vision of a future landscape that combines its strength in online shopping with more traditional brick-and-mortar retailing. In one of its most recent such tie-ups, the company last November announced it would purchase 36.2% of traditional hypermarket operator Sun Art Retail Group Ltd. for HK$22.4 billion ($2.86 billion). 

Alibaba has also moved aggressively into traditional retail concepts with high-tech touches to improve efficiency and convenience. One of its main initiatives has been an unmanned convenience store concept, and the company is also reportedly building a high-tech shopping mall in its hometown of Hangzhou. Alibaba has also rolled out smaller automated traditional retailing concepts such as vending machines that sell fresh live crabs, a product usually sold in supermarkets and seafood markets.

Contact reporter Yang Ge (geyang@caixin.com)