Alibaba Acquired Convertible Bonds in Red Star Macalline

Alibaba has acquired $635 million worth of convertible bonds in Red Star Macalline, one of China’s largest furniture retailers. If converted, the bonds would count to nearly 10% Alibaba’s stake in Red Star Macalline.

Additionally, the Chinese e-commerce giant purchased 3.7% of the company’s public traded shares on the Hong Kong stock exchange, according to a filing with the Shanghai Stock Exchange.

The investment would integrate both the companies to partner in home furnishings, home improvement, shopping malls, and other businesses. Alibaba will provide tech support aligned with its new retail vision. The investment will enable Red Star to improve its physical stores and take advantage of Alibaba’s e-commerce channels.

Red Star operates over 300 shopping malls and 364 home improvement centers in China, in addition to the centers and malls, it provides leasing space to retailers, selling its own inventory and services, including interior decoration consultations and construction.

This investment comes about six months after Red Star integrated with Alibaba rival Tencent, for digital marketing. Alibaba’s Home Times, a retail chain opened in 2017, gives a vision of what might Alibaba is planning to do with Red Star Macalline’s malls and online operations.

The unit emphasizes offline-to-online retail, allowing customers to scan products for detailed information, buy them online and pay with Alipay, and it also facilitates large screens that let buyers see how items will look in their homes.

Customers’ shopping behavior is then used by Tmall, Alibaba’s business-to-consumer e-commerce site, to pick products to add to stores in various location throughout its reach, making inventory management more efficient.

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