Chinese etail giant Alibaba is investing $4.6bn (£2.9bn) in electronics chain Suning, one of the country’s largest bricks-and-mortar retailers.

The deal, which was revealed by the two businesses in a joint statement, will see Alibaba become Suning’s second largest shareholder with a 19.99% stake.

As part of the agreement, Suning is also acquiring a 1.1% stake in Alibaba for $2.25bn (£1.45bn). The retailers said the deal will combine their strengths in online and offline commerce.

Customers will now be able to browse electronics in Suning stores before purchasing them online.

The retailer added that its network of around 1,600 stores in China would join forces with Alibaba’s distribution operations in a bid to slash delivery times. It said that it could deliver items to customers within two hours following the tie-up.

Suning will also open a flagship store on Alibaba’s Tmall.com platform, which focuses on consumer electronics, home appliances and baby products, as part of the agreement.

Suning chairman Zhang Jindong said: “The collaboration between Alibaba and Suning is a milestone in China’s retail industry and its influence on ecommerce and offline retailing will be enormous.”

Jindong added that the deal signalled “a new trend in the internet age: strengthening China’s traditional industries by leveraging the power” of the internet.

The move comes at a time when Alibaba has been seeking to tap into home electronics, unveiling partnerships with retailers Gome and Haier to offer more appliances online.

JD.com deal

Alibaba’s link up with Suning was unveiled days after its biggest online rival in China, JD.com, revealed it had purchased a 10% stake in grocer Yonghui Superstores.

JD.com struck the $700m (£450.5m) deal with similar goals to improve its supply chain and broaden its offline proposition.

Yonghui Superstores operates 364 supermarkets in China and plans to open 179 more this year.

Its profits jumped 16.3% to 527m yuan (£54.6m) during the first half of its financial year as revenues hit 20.8bn (£2.16bn).

The investment means JD.com can now appoint two directors to the board of Yonghui.

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