E-commerce giant Alibaba Group Holding Ltd. invested 4.4 billion yuan ($640 million) in Red Star Macalline Group, China’s largest furniture retail chain, in its latest move into the home improvement sector.
Alibaba subscribed 4.4 billion yuan of convertible bonds issued by Macalline’s controlling shareholder, the furniture chain said Wednesday in a statement.
If fully converted, Alibaba will hold 10% of Macalline’s Shanghai-listed shares. In addition, Alibaba acquired 3.7% of Macalline’s Hong Kong-traded shares, according to Macalline. Macalline operates 364 stores in 199 cities, according to the company.
The two companies will partner in home improvement, furnishings shopping malls and other businesses, according to a framework agreement signed by Alibaba and Macalline.
The deal follows a string of Alibaba tie-ups in the lucrative home furnishings sector. Last month, Alibaba announced an undisclosed investment in furnishing services startup Many Craftsmen.
Industry research platform Iyiou estimated the home furnishings industry would be worth about 4.49 trillion yuan this year, up 2.2% from the previous year.