Suning, Hony to Invest $420 Million in China Video Site PPTVBloomberg News
Suning Commerce Group Co., China’s largest electronics retailer, said it plans to invest $420 million in video website PPTV.com together with private-equity firm Hony Capital Ltd.
Nanjing, China-based Suning will pay $250 million for a 44 percent stake in PPTV, making it the video company’s largest shareholder, according to a statement handed to reporters at a press conference in Shanghai yesterday.
Suning has been investing in its online operations as Chinese consumers increasingly make purchases through the Internet. In September, it introduced an open platform to allow other retailers to sell on its website. Last year, it bought Redbaby, an online retailer of baby products.
The PPTV purchase gives Suning a foothold in the Chinese online video market, which consultant IResearch estimates may generate 16.2 billion yuan ($2.7 billion) in revenue next year. Baidu Inc., China’s second-largest Internet company by market value, bought PPStream Inc. in June for $370 million and has been combining it with IQiyi.com to create China’s largest online video platform.
Suning is expanding its product offerings to become less reliant on its traditional electronics business as it faces a weaker Chinese economy. The company said in August it had submitted preliminary plans to relevant government departments to set up a bank.
The retailer, which said July 30 its first-half net income fell 58 percent to 732.5 million yuan, also faces increasing competition from Gome Electrical Appliances Holding Ltd. and 360buy Jingdong Inc.
— With assistance by Lulu Chen, Liza Lin, and Zijing Wu