Chinese online retailer Suning.com has acquired 37 outlets of Wanda Department Store, the department store unit of Chinese conglomerate Wanda Group, chairman Zhang Jindong announced at the company’s Lunar New Year meeting held Tuesday. The company didn’t reveal the value of the deal.
The 37 stores are mainly located in central business districts or central areas of China’s first- and second-tier cities and have combined store “memberships” of 4 million, and annual customer traffic of nearly 3.2 billion, according to the company.
Though the acquisition, Suning.com plans to revamp the offline shopping experience and department store supply chain operations by leveraging the power of new technologies like big data and artificial intelligence.
“The prosperity of the physical retail industry can’t rely on the traditional models. It needs improvement in efficiency and experience by using internet technologies so that users can feel the service quality and happiness,” said Zhang.
As a major player in China’s new retail market, Suning.com has been pushing its offline expansions in an effort to promote its smart retail solutions. The company aims to open 15,000 offline stores this year. The Wanda outlet acquisitions allow diversification into department stores.
The deal isn’t surprising given the history between Suning and Wanda Group. Together with Tencent, JD.com and Sunac China Holdings, Suning.com, formerly Suning Commerce, purchased a 14% stake in Wanda Commercial Properties, Wanda’s property arm, for RMB 34 billion ($5.4 billion) in 2018.
Like many of the offline retailers, Wanda Department Store, once a pillar business of the Chinese conglomerate, has been facing an uphill battle due to the competition from online retailers.
In addition, Suning is also speeding up its new retail initiative with the launch of big data-driven unmanned store and autonomous heavy truck to improve logistics efficiency.