Alibaba's Purchase Of Intime Stake Brings Two Chinese Billionaire Friends Even Closer

Apr 2 2014, 2:33am CDT | by

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.

Word this week that Alibaba plans to invest in Shen’s  shopping mall chain Intime brings the two billionaires that Ma described as “old friends” much closer together in business.

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

 
 
 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Windows 10 Ads Excessively Show Babies
Windows 10 Ads Excessively Show Babies
Microsoft released a series of Windows 10 commercials with lots of babies.
 
 
Barclays Fires CEO Antony Jenkins
Barclays Fires CEO Antony Jenkins
The head of Barclays has sacked Antony Jenkins. And the reasons are obvious.
 
 
Microsoft Lays Off 7,800 Employees
Microsoft Lays Off 7,800 Employees
Microsoft just announced the rumored major lay off.
 
 
Starbucks Raises Prices
Starbucks Raises Prices
The coffee company raises prices for the second time in two years.