The world’s biggest online retailer has said it will move to China from the United States and Australia as part of its effort to diversify its business.
Staten Island Advance (SIRA), which has more than 1,600 stores across the world, said on Thursday that it had made an initial investment of US$1 billion in a Chinese subsidiary and plans to raise further capital from the Chinese government.
SIRA’s US$100 million investment in China in October 2016 was the largest in a single deal by a US retailer in the past 20 years.
The move follows a period of significant growth and expansion in the country, which saw sales grow by nearly a quarter to US$21.2 billion in 2017, according to the Chinese-language company’s annual report.
It will mark the first major shift by a global online retailer from the US to China in more than two decades, according a statement from the company.
“We will continue to expand our footprint to meet growing demand and continue to support our local partners,” SIRA CEO Steve Chen said in a statement.
The company said that it would invest in the US, Canada, and Australia in the coming years.
SIra said it planned to invest US$5 billion in its US retail operations over the next five years.
It’s unclear when the company will start selling products online.
The company declined to give any timeline.
The Chinese government has a large number of online retailers, including China’s Alibaba Group Holding Ltd., which is owned by China’s state-owned media company, Xinhua News Agency.
SIWA has been working to diversified its business to meet demand in the global marketplace.
In 2016, China approved plans for a “multi-brand” online shopping platform called Alibaba Shopping that would allow users to buy goods from dozens of brands on Alibaba.
The platform would be controlled by China Telecom, the country’s largest telecoms operator, and run on Alibaba’s cloud platform.Bloomberg