Alibaba Group announced today that it reached a strategic cooperation agreement with household electrical appliance maker Haier Group. Alibaba will invest HK$2.82 billion ($363.90 million) in Haier Electronics, a listed subsidiary of Haier Group, to develop a complete set of logistics and installation service system for home appliances and bulky commodities (report in Chinese).
Under the deal, the two parties will set up a joint venture Ririsun Logistics to run the business. In addition to delivery and installation services, Ririsun also focused on the research and development of supply chain management solution plans and products.
Of the total funding, Alibaba will invest HK$1.86 billion in Ririshun for around 34% stake in the company. The rest of the capital will be used to buy the newly issued shares in Haier Electronics for a 2% stake in the company.
Ririshun currently has nine distribution bases and ninety delivery centers around the country, covering more than 2 million square meters of inventory space.
Zhang Ruimin, board chairman and CEO of Haier Group, said that this cooperation not only aims to expand the business scale, but also to provide better user experiences.
Alibaba has made its utmost efforts to develop logistics business this year in an attempt to complete the industrial cycle and consolidate its foothold in the e-commerce ecosystem. In May, the company initiated China Smart Logistic Network, or CSN, a logistic program aiming to support 30 billion yuan worth of daily transitions and same-day delivery to every corner in China.
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