Alibaba Group Holding Limited, the world’s largest e-commerce platform by volume, has made its first investment in a home furnishings company by purchasing 15% of Beijing Easyhome Furnishing Chain Store Group Co., Ltd.
Easyhome operates four lines of business: home furnishing, finance, consumer products and supply chain logistics. Easyhome makes and sells furniture and home decorations in its 223 stores located in 29 China provinces. For fiscal 2016, Easyhome reported gross revenue of 50 billion RMB, or USD $7.9 billion.
Alibaba will pay approximately RMB 5.45 billion, or USD $8.65 billion, for its portion of Easyhome.
Jack Ma, founder of Alibaba, has stated that his goal is to use technology to merge online and offline retail business models to invent a paradigm he calls the New Retail, which he defines as using technology and customer data to merge online and offline shopping experiences in virtually every business sector.
Alibaba’s goal is to have 10 million businesses and 2 billion consumers worldwide using at least one of its seven online platforms, which include Taobao, AliExpress and Tmall.
Major U.S. retailers such as Macy’s already are operating on Alibaba platforms to reach Asia’s burgeoning middle class. Last month, Alibaba was rumored to be exploring an arrangement with Kroger, the second largest retail chain in the U.S. by revenue, although neither company has published a statement verifying the talks.
In an email to Furniture Today, an Alibaba spokesperson said the investment in Easyhome “will combine the strengths of the world’s largest e-commerce platform and the rich offline resources of Easyhome. Alibaba will apply its consumer insights, membership program, expertise in cloud and enterprise systems, as well as its logistics platform, to support the digital transformation of Easyhome’s physical stores. Both sides will work together to redefine the consumer shopping experience with end-to-end home improvement solutions, from home design to refurbishment projects.”