What if Amazon bought a seat on the board of Best Buy? That's essentially what's happening in China, where Alibaba announced it will pay $4.6 billion for a 20% stake in Suning Commerce Group, which operates more than 1,600 electronics stores in the Middle Kingdom. Best Buy runs close to 1,800 worldwide.
The move by China's biggest — and the world's most profitable — Web marketplace signals the necessity of having immediate delivery options in place for even large, unwieldy merchandise. According to a press release announcing the deal, Suning will provide that capability to Alibaba's third-party sellers via eight national and 57 regional distribution centers covering 90% of China. It operates some 1,700 last-mile delivery stations.
"This new alliance brings forth a new commerce model that fully integrates online and offline," said Alibaba Executive Chairman Jack Ma in a statement.
Added Suning Chairman Zhang Jindong, "This collaboration signals a new trend in the Internet age: Strengthening China's traditional industries by leveraging the power of Internet."
In the US, Amazon performs same-day delivery in New York, San Diego and Tampa Bay as a free service to Prime members on orders of $35 or more. Ebay recently ended its same-day delivery experiment, judging it nonessential for its seller community. Deliv, a same-day delivery service, meanwhile, has expanded to eight markets that include Chicago, Los Angeles, and New Jersey.
This article first appeared on dmnews.com.