Apr 2 2014, 2:33am CDT | by Forbes
When China e-commerce icon Jack Ma first met businessman Shen Guojun on an airplane years ago, he looked at his name card and recognized Shen’s main company–Yintai–right away. Yet Shen’s name was more obscure. “He has run a great business, but few people know him and see him,” Ma told me in a telephone interview about Shen last year.
Under the agreement announced this week, Alibaba will pay up $692 million for a 9% stake in Intime, which operates 36 malls and stores around China. Alibaba will also receive bonds that can be converted into new shares that would increase Alibaba’s ownership stake to at least 25%. Alibaba’s goal is to expand its online-to-offline services as it looks to deepen its mobile e-commerce business.
China’s Internet companies such as Alibaba, Tencent and Baidu, which now rank among the industry’s largest globally, are scrambling for advantage the country’s e-commerce market.
Ma and Shen, both natives of entrepreneurism mecca Zhejiang Province, last year already announced their first major cooperation: a nationwide logistics business called Cainiao Network. When it was unveiled last May, Cainiao –which means “rookie” or, more literally, “a green bird”–was described as a national logistics backbone that would support Alibaba’s huge daily trade and China’s e-commerce landscape. The name was picked because the main partners are relative newcomers to the field. Shen is CEO of the business, whose total investments in the next eight years are expected to be $16 billion.
Besides Alibaba Group and Shen’s China Yintai Group, investors include Fosun International, led by yet another billion son of Zhejiang Province, Guo Guangchang (his Fosun Media is a publishing licensee of Forbes Media), and S.F. Logistics, whose founder, Wang Wei, ranks No. 22. Ma is Cainiao’s chairman, working closely with Shen.
Ma told me last year that that he and Shen share many friends. “His execution ability is amazing. He is good at making things happen, but not good at the talk, ” Ma said. Shen will have a chance anew to prove his execution skils as he works to integrate Intime’s business with fast-growing Alibaba’s.
– Follow me on Twitter @rflannerychina
Source: Forbes Business
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