Alibaba Group BABA (NYSE) globalizes its market strategy

Chinese Internet giant Alibaba Group BABA (NYSE) gained 20% of the electronics retailer Suning Commerce Group Co Ltd (SHE: 002024). The investment is $ 4.56 Billion. The deal is part of a wave of acquisitions of shrinking Chinese market in the fierce competitive battle for consumer services, accessible via smartphone. Premium to the market value of Suning Commerce is estimated at 10%. Meanwhile, Suning Commerce will receive 1.1% of Alibaba shares to 14 billion yuan ($ 2.3 billion). So purely investment will be equal to $ 2.3 billion.

According to Alibaba's statement last night, this is a step towards strategic integration of internet marketing and store sales. Thus, online shoppers will be able to receive your purchases in 1600 over the site of Suning.

Analysis of Arete Research defines this approach as positive for the company, which adds storage and service areas without disrupting their core strategy as an Internet merchant. Suning is expected to optimize sales and for children performed by belong to the Alibaba Group platform tmall.com.

“We believe that to work with Suning’s logistics network, Cainiao can have a broader coverage to the Chinese consumers and we can give people better logistics service,” Mr. Daniel Zhang, Alibaba’s chief executive said.

Оn August 4 Alibaba Group names Michael Evans (former second president of the board of Goldman Sachs and head of emerging markets at the bank) as President in order to increase market globalization, this is the first serious investment amid the continued long term down trend of the shares (the last price is $ 80.47 at 52W Range = $ 76.21 - $ 120.00)

Based on normal probability distribution, the odds of Alibaba to move over $ 96.56 or more in 30 days from now is near 1%. Probability of Alibaba Group Holding price to stay between its current price of $ 80.47 and $ 96.56 at the end of the 30-day period is about 60.77%