Photo: IC

Chinese e-commerce company Alibaba Group and Chinese appliance maker Haier Electronics Group Co Ltd are planning to develop a logistics joint venture, the two companies said Monday.

Experts said this indicates Alibaba is launching its logistics network and promoting development in third- and fourth-tier cities and rural areas.

Alibaba is investing HK$2.822 billion ($364 million) in the joint venture, including HK$1.857 billion in the joint venture Gooday, which was a logistics subsidiary of Haier, and HK$965 million for a 2 percent stake of Haier, Alibaba told the Global Times Monday via e-mail.

In the investment in Gooday, Alibaba bought a 9.9 percent stake of the company for HK$541 million as well as HK$1.316 billion worth of bonds, which can be converted to a 24.1 percent stake of Gooday, according to the statement.

The logistics and service network provided by Gooday will provide comprehensive support to Alibaba's online marketplace tmall.com, the statement said.

The investment from Alibaba will help Haier to develop its logistics system and strengthen Haier's cooperation with tmall.com, Haier said in a filing released Monday on the Hong Kong Stock Exchange (HKEx).

Haier suspended its share trading on Friday and resumed it Monday. Its share price increased 13.05 percent Monday, closing at HK$21.050, according to the website of HKEx.

This cooperation with Haier indicates Alibaba is moving into the logistics field, Xu Yong, chief analyst at China Express and Logistics Consulting, told the Global Times Monday.

Haier is famous for high-quality after-sales service, including appliance delivery and installation, Xu said, noting it is wise for Alibaba to cooperate with Haier, which has rich experience and a good reputation.

Logistics has been a weakness for Alibaba so the company is starting to work on this, Wang Tingting, an analyst at iResearch, told the Global Times Monday.

The most popular products sold on taobao.com is clothing, which is not hard to deliver, so other logistics companies can do this well, Wang said, but large-sized products sold on tmall.com, such as home appliances and furniture, have higher requirements for delivery which normal logistics companies often cannot meet.

Taobao.com and tmall.com are online shopping websites owned by Alibaba.

On November 11, 2013, also called Singles' Day in China, tmall.com achieved total sales revenue of 35 billion yuan. The revenue of large-sized home appliances on the day saw a 350 percent year-on-year increase, Alibaba said in the statement, with no specific amount revealed.

Through the joint venture Gooday, Alibaba and Haier will build a leading logistics and service network for large-sized products, promoting progress in the Chinese logistics industry, Alibaba said in the statement.

Gooday has a wide coverage of lower-tier cities and the countryside. It currently has distribution stops in more than 2,800 counties and 190,000 village-level service stations, according to the introduction on its website rrs.com.

First- and second-tier cities enjoy fast and convenient logistics service, but in other places, the logistics service is not satisfactory, Wang said, noting Alibaba is making up the service deficiency in these areas.

Tmall.com received complaints from customers in counties and villages that third-party logistics companies refused to deliver the large products they purchased on tmall.com to their doorstep, Alibaba told the Global Times via e-mail.

Unsatisfactory delivery service and a lack of installation may push customers to buy home appliances or furniture from offline stores, therefore Alibaba is trying to solve the problem.

In addition to stepping into the logistics sector, Alibaba is also increasing its competition with other e-commerce platforms and offline stores, who are also trying to sell online, experts said.

JD.com is famous for selling electronics but it lacks adequate capital to expand to third- and fourth-tier cities, Wang said.

Compared with Alibaba, Suning Commerce Group has an obvious advantage in that it has offline shops which allow customers to try the tangible products, Wang said, noting Suning is trying to combine its online and offline services but the combination will take some time and large investment.

Other offline shops, such as Easyhome Investment Holding Group Co, which run furniture chain shopping malls, are also trying to develop their own online shops in order not to be free "assistants" for e-commerce businesses.

It will cost a lot to build a new e-commerce platform and persuade customers to choose it, Wang said.

However, online shopping is an inevitable trend, Xu said, noting Haier has realized this and is trying to keep up with the trend.

Taobao offering app users lottery tickets 

Taobao.com introduced a surprise to users of its app on Monday - lottery tickets. Taobao.com announced on its Weibo account Monday that it has bought all the tickets for the latest round of Shuangseqiu, a Chinese lottery, and will give them to users of its app. Details on how to get the tickets will be released Wednesday and the lottery winners will be announced Thursday. Taobao.com said there will be more than a million winners and the first prize will range from 5 million yuan ($823,500) to 15 million yuan.