Alibaba Expands Equity Stake In Retail Management Solution Firm Baison

Alibaba Group Holding Ltd. has agreed to acquired ten million shares of Shanghai Baison Software Co., Ltd, a retail management solution provider listed on China’s New Third Board, following a purchase of five million shares at RMB9 apiece two weeks ago.

The latest purchase at RMB12 per share means Alibaba will have spent RMB165 million (US$24 million) in total to acquire 26.67% of Baison, becoming its largest shareholder.

The acquisition is designed to support Alibaba founder Jack Ma’s "New Retail" vision, in which online, offline, logistics and data are integrated to create a new retail business model.

As part of this strategy, Alibaba has been investing in or partnering with traditional brick-and-mortar retailers and companies that help integrate online and offline shopping, including logistics firms, data and software companies.

In February, Alibaba established a strategic partnership with traditional retailer Bailian Group to jointly design cross-channel store operation and ordering systems. Last week, Alibaba announced a deal to buy an 18% stake in the Lianhua Supermarket chain, a unit owned by Shanghai-based Bailian.

In January, Alibaba offered to privatize Intime Retail, a Chinese department store and mall operator, while it bought a stake in electronics retailer Suning Commerce Group in 2015. Last year, Alibaba acquired supermarket chain Sanjiang Shopping Club Co., Ltd. and is rumored to be eyeing a stake in retail chain RT-Mart International Ltd.

Alibaba’s latest buy, Shanghai Baison Software was founded in 2000 to provide management systems for retail companies, especially in the clothing, sports, home appliance, cosmetics, jewelry and food sectors. The company currently has 15,000 customers in China, including 3,000 medium and large-sized companies and 26 listed clothing and shoe companies.

In 2016, its revenue and net profit reached RMB139 million (US$20 million) and RMB301,000 (US$44,000), up 16.97% and down 50%, respectively, according to the company’s securities filings.

 
China Expert network

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