China's Biggest E-Commerce Player, Alibaba, Eyes Offline Expansion With $692 Million Investment

The investment will allow Alibaba to pioneer new ways to integrate online and offline commerce.
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Dhani Mau
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The investment will allow Alibaba to pioneer new ways to integrate online and offline commerce.
A mainland Chinese tourist carries multiple shopping bags in Hong Kong. Photo: Aaron Tam/AFP/Getty

A mainland Chinese tourist carries multiple shopping bags in Hong Kong. Photo: Aaron Tam/AFP/Getty

A new deal between two of China's leading retail businesses could continue to revolutionize the way shopping is done in the country.

China's leading e-commerce company Alibaba, which owns online shopping platforms Tabao Marketplace and Tmall.com, announced Monday that it invested $692 million in Chinese department store chain Intime Retail Group.

The investment is Alibaba's first big move into offline retail and the company described the partnership as a step towards fostering deeper integration between e-commerce and brick-and-mortar shopping, through what they call online to offline (o2o) technology.

For instance, Intime has previously worked with Alibaba's e-payment affiliate, Alipay Wallet, to give shoppers the option to pay for things in-store with their smartphones. "We see significant opportunities to extend our e-commerce platform to physical retail," said Daniel Zhang, COO of Alibaba Group, in a statement.

Another potential o2o option: purchasing items online and picking them up in store.

These ideas aren't new -- U.S. stores including Nordstrom and Best Buy already offer in-store pickup on online purchases, for example. But the investment gives Alibaba a big strategic partner to explore further omnichannel partnerships. Soon, it may be that U.S. retailers are looking to Alibaba for the next big ideas in online-to-offline retail, rather than the other way around.