China's online-to-offline opportunities have reached a new level with investment from China's top e-commerce firm into one of China's leading retail chains.

China's Alibaba Group Holding Limited will invest approximately CNY28.3 billion for a 19.99% stake in Suning Commerce Group Limited. After the closing of the investment in Suning, Alibaba will be the second-largest shareholder in the Chinese electronics retailer.

Concurrent with Alibaba's investment in Suning, Suning will invest up to CNY14 billion to subscribe for up to 27.8 million newly issued ordinary shares of Alibaba. After the investment, Suning will hold approximately a 1.1% interest in Alibaba's enlarged issued and outstanding share capital.

The strategic collaboration between Alibaba and Suning marks a milestone that signals the further integration of digital and offline retail, otherwise known as O2O or online-to-offline. This strategic collaboration will bring benefits to hundreds of millions of Chinese consumers who use Alibaba's online platforms and Suning's offline channels. By cooperating, Alibaba and Suning will be able to provide holistic and more convenient shopping experiences, as well as superior customer service to users looking to purchase online and through mobile devices.

As part of the transaction, Alibaba and Suning have entered into a strategic collaboration agreement to build on synergies in e-commerce, logistics and incremental business through joint omni-channel initiatives. Under the collaboration, Suning will open a flagship store on Alibaba's Tmall.com platform, focusing on consumer electronics, home appliances and baby products.

Suning will also become a partner of Cainiao, Alibaba's logistics affiliate and Suning's logistics services cover almost all of the 2,800 counties and districts in China.

Consummation of Alibaba's investment in Suning and the investment by Suning in Alibaba are subject to customary closing conditions, including regulatory approvals and, in the case of the investment by Alibaba in Suning, the approval of the shareholders of Suning.