The Alibaba stock price is up 2% this morning (Monday) after the company announced it will spend $4.63 billion on the electronics chain Suning Commerce Group Inc.
Alibaba Group Holding Ltd. (NYSE: BABA) officials said the $4.63 billion price tag will buy the company a 20% stake in Suning. In return, Suning will receive a 1.1% stake in Alibaba.
Suning is a brick-and-mortar chain with more than 1,600 stores in 289 cities in China. The purchase will help Alibaba logistically. Suning says its national distribution centers cover 90% of China.
Alibaba said the partnership will also allow customers to shop for electronics in-store and then pay using their mobile Alipay Wallet accounts.
This "online-to-offline" business model has been a focus of several Chinese Internet companies recently. Competitors Tencent Holdings Ltd. and Baidu Inc. (Nasdaq ADR: BIDU) have both added online-to-offline services as well. JD.com Inc. (Nasdaq ADR: JD) has created a similar partnership with offline grocery stores.
Alibaba's purchase of a stake in Suning is the latest in a string of acquisitions for the e-commerce company. Over the past two years, BABA has purchased companies in numerous industries including entertainment, retail, tech, and even professional soccer.
Alibaba stock is down 22.3% in 2015, but it has climbed 2.1% in the month of August. Shares currently trade at $80.76, which is a great buy-in point according to Money Morning experts. In fact, our team of experts agree that Alibaba stock is one of the best long-term investments on the market today...go here for more on why to be bullish on BABA...
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