- Alibaba is buying 15 percent stake for USD 866m in Easyhome, 2nd largest home-improvement store in China
- The duo will launch an online platform for home decoration products and services
- The move marks Alibaba’s latest push to combine its digital prowess with physical stores in its “new retailing” initiative
Alibaba Group said Sunday it will acquire a 15 percent stake for RMB5.45 billion (USD866 million) in Easyhome (居然之家), China’s second-largest home-improvement supplies and furniture chain operator, as the e-commerce giant keeps expanding its reach into more offline and retail business verticals.
Through the partnership, Alibaba is going to help Easyhome digitalize its offline stores and merge its customer and products data for operations efficiency. The duo also plans to establish an online platform for home decoration which covers everything from home design, material retail to construction.
“The investment will combine the strengths of the world’s largest e-commerce platform and rich offline sources of Easyhome,” Alibaba said in a statement.
The investment further underpins Jack Ma’s ongoing “New Retail” strategy which seeks to merge online and brick-and-mortar shopping to create an integrated online-to-offline shopping experience for consumers. Alibaba made the first move in 2015 when it took a 20 percent stake in Suning, China’s top consumer electronic chain.
The competition between Alibaba and Tencent – though a new comer – in offline retail has been intensifying after the latter jumped into the same rodeo with a series of acquisitions and alliance building up. Tencent, leveraging on its super app WeChat which is ubiquitous and widely accepted in local merchants, has invested into JD.com, Carrefour’s China unit, Wanda commercial properties, and most recently, Chinese menswear HLA.
Tencent ignited a warfare with Alibaba and extended the battleground from supermarkets/department stores to vertical industries. HLA is the leading menswear brand in China. It’s not hard to imagine that Alibaba would react with a similar move.
Easyhome has 223 stores in 29 provinces, autonomous regions and municipalities across China. The company reported more than RMB 60 billion in sales last year. Interestingly, though started as a furniture one-stop shop, the company tried diversifying and branching out to other areas, such as setting up food stores, gym, cinemas and consumer electronic retailers. Easyhome rolled out a supermarket dubbed Eatown in January 2017 and has incubated its own cashier-less store Eatbox.