After decades as a Communist stronghold, the thought of the “Chinese market” is still a comparatively new one, posing some interesting possibilities as well as some interesting challenges. One new possibility comes from Alibaba, a giant in the Internet field in China, who has recently agreed to purchase an ownership stake in China's Intime Retail, in a deal reportedly valued in nine-figure terms. What will come out of that deal, however, is perhaps even more noteworthy.
The reports say that Alibaba will shell out fully $692 million in exchange for a 35 percent ownership stake in Intime Retail. Intime Retail operates an array of department stores in China, and the resulting combination of Alibaba and Intime Retail will produce a newfound focus on retail opportunities in the “offline-to-online” class.
With this, users will get access to what Alibaba and Intime Retail called in a press statement “...a more convenient shopping experience,” with Alibaba's line of retail platforms augmenting those offered by Intime Retail, and even perhaps some intermingling of Alibaba's online efforts and Intime Retail's own, as exemplified by Yintai.com. Moreover, Alibaba's own Tmall.com will gain access to the Intime inventory, and giving Tmall users access to a wider variety of international product releases. Intime shoppers will in turn get access to specific promotion efforts while in stores, and access to prepaid cards powered by the Alipay mobile wallet service.
This combination of factors represents some significant potential growth, and some are already wondering if Alibaba might end up raising sales commissions in a bid to spark further growth. Alibaba Group's COO, Daniel Zhang, notes that the company is actively inclined to “...opportunities to extend our e-commerce platform to physical retail, developing a more engaging, omnichannel and digitally-connected shopping experience.”
What's more, Alibaba and Intime Retail represent just part of the picture of mergers and acquisitions going on in the Chinese market, with several other such efforts coming in from places like Baidu and Tencent, particularly in the wake of Alibaba's IPO launch in New York City recently.
All of these together—whether efforts by Alibaba, Baidu, Tencent or anyone else—simply underscore the fact that China is a huge and relatively untouched new market. It's not surprising to see all manner of firms eager to get in on the action, as for the first time in a long time, China has represented a major, viable new market with plenty of individuals eager to make some purchases. That's an opportunity, and one that we've seen companies like Apple (News - Alert) eager to get in on over the last few years.
But in order to take advantage of that opportunity properly, companies have to offer a proposition worth getting in on at the user level, a significant value, so to speak, that includes things like plenty of choices and ease of access. That's where Alibaba and Intime Retail may shine in this case, though only time will tell if the new coalition can present a package worth opening.
Edited by Cassandra Tucker
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