Alibaba and Suining Collaboration; How is it Expected to Work?
Even with the slowing Chinese economy Alibaba Group Holding Ltd still carries on widening and enriching its e-commerce platform.
In an announcement on Wednesday, Alibaba and Suning Appliance Co said in an announcement that the Chinese Internet giant will be paying 28.3 billion yuan to take about twenty percent stake in the chain of consumer electronics of China.
However, with Alibaba's shares down almost sixteen percent the investment in Suning is being questioned. According to the new arrangements, Suning has to start a flagship store on the Tmall.com platform run by Alibaba. This online platform mainly focuses on home appliances, consumer electronics and baby products. The company says that this collaboration will help the merchants selling their products on Taobao and Tmall to deliver their items more rapidly to buyers through the "57 regional distribution centers, 353 city forwarding centers, and over 1,700 last-mile delivery stations" that Suning has across China.
Daniel Zhang Alibaba's CEO assured that the weak Chinese economy is not likely to have much effect on the companies that follow similar business model like Alibaba.
It seems as if the customers ordering electronics goods will receive their deliveries just within hours as Suning has a wide spread infrastructure in different corners of China.
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