Chinese e-commerce giant Alibaba Group Holding has invested about Rmb4.36 billion ($633 million) in Red Star Macalline, one of China’s biggest furniture and home improvement retailers, through a five-year convertible bonds acquisition, according to a filing with the Shanghai Stock Exchange.
The convertible bonds would give Alibaba about 10 per cent stake in Red Star Macalline, which operates at least 300 shopping malls and 364 home improvement centers throughout China.
In addition to the convertible bonds, Alibaba also acquired a 3.7-per cent stake in the furniture and home improvement retailer through the firm’s publicly traded shares on the Hong Kong stock exchange.
The investment calls for Alibaba and Red Star to partner in home improvement, home furnishings, shopping malls, and other businesses. Alibaba will provide technology support aligned with its new retail vision that integrates digital and physical channels, according to the agreement signed by the two companies.
Alibaba’s investment came six months after Red Star Macalline announced its partnership with Tencent to cooperate in digital and diversified user services, providing more multi-services for home brands, and comprehensive digital optimisation and operation.
Aside from being one of the largest furniture retailers in China, Red Star Macalline is also an active venture capital investor.
Last week, it participated in the $19.1 million Series C funding round in Orvibo, a Chinese technology firm focused on Internet-of-things technologies and intelligent household hardware.
It also led the corporate round in DreamMaker, an intelligent air purification product development and production company based in Zhejiang, early this month.
The firm also backed the Rmb50-million Series A round of Ruibosi Medical Technology in April. Last November, it led the funding rounds of Seahorse LDY, a Shanghai-based O2O laundry service company, and Aibee, an AI-focused technology firm.
Meanwhile, Alibaba was reportedly in talks with Germany’s Metro to take a stake in the German wholesaler’s China operations. Alibaba‘s interest comes after rival Tencent last year signed a partnership deal with France’s Carrefour, according to a Reuters report in January.
Metro has 95 stores in China and real estate assets in major centres, such as Beijing and Shanghai. Metro and Alibaba have already partnered in online retail in China.