(Yicai Global) Oct. 19 -- Subsidiaries of Alibaba Group Holdings Ltd. [NYSE:BABA], China's e-commerce giant, and Suning Commerce Group Co. [SZE:002024] have invested CNY1 billion (USD148 million) to set up a joint venture that will run Suning's stores and sales channels on Tmall, an Alibaba online marketplace.
The new company is provisionally named Chongqing Tmall-Suning E-Commerce Co., Shenzhen-based Suning said in a statement yesterday. Suning contributed CNY510 million for a 51 percent stake, while Alibaba invested CNY490 million for the remainder of the company.
According to the announcement, the move will help boost Suning's sales and brand image on Tmall, enhance its services for brand owners, and improve its operating efficiency in terms of responding to consumer needs. The joint venture will innovate the existing online-to-offline operating model, focusing on improving the quality of services for small- and medium-sized retailers and consumers.
Taobao China Software Co., an Alibaba affiliate, is Suning's second-largest shareholder with almost a 20 percent stake.