Alibaba will acquire a $486 million stake in a Chinese retail data company

SHANGHAI (Reuters) – China’s largest e-commerce firm Alibaba Group Holding Ltd is to invest $486 million (£350 million) in a stake in a domestic big data firm focused on hotels and retail, as part of a drive to deepen its offline presence.

The company will buy a 38 percent stake in Shiji Retail Information Technology Co. through its subsidiary Alibaba Investment Ltd., the data company’s parent company said in a letter filed Thursday with the Shenzhen Stock Exchange.

The deal is part of a “new strategic cooperation in retail,” Beijing Shiji Information Technology Co. Ltd said in a statement, referring to a shift by Alibaba and its rivals toward using big data to shake up China’s vast but stagnant retail market.

Alibaba is strengthening its retail presence by investing more than $10 billion in brick-and-mortar stores, despite growing competition in that market from rival Tencent Holdings Ltd.

Alibaba did not immediately respond to a request for comment on Beijing’s Shiji Information announcement.

Beijing Shiji Information says it provides software and data systems to hotel companies such as InterContinental Hotels Group, retailers such as Starbucks Corp and entertainment companies.

The latest deal comes after another Alibaba subsidiary, Taobao (China) Software Co Ltd, agreed to acquire about 15 percent of Beijing Shiji Information for 2.81 billion yuan in 2014 to help strengthen its online travel business.

(Reporting by Adam Jourdan and Pei Li; Editing by Muralikumar Anantharaman)