A representative from Suning.com, the e-commerce platform of electronics retailer Suning, told local media that their negotiation for the acquisition of Redbaby.com, a Chinese e-commerce website for baby and maternal products, has entered the financial audit stage, and the deal is expected to be closed in the third quarter of 2012.
Suning's investment and acquisition department, which is in charge of this acquisition, revealed that Suning.com will gain a controlling stake of Redbaby.com via this deal. After the acquisition, Redbaby.com will be integrated into Suning.com.
In addition, the representative from Suning.com also said that the reason for acquiring Redbaby.com is mainly because of its supply chain management of baby and maternal products in China. Redbaby.com currently has a complete team structure and Suning.com can learn from its procurement and customer management models.
In July 2012, Sun Weimin, vice chairman for Suning and chairman for Suning.com, announced that Suning.com will implement acquisitions targeting medium- and small-sized e-commerce enterprises in the second half of 2012. Sun said, though the current valuation of Chinese e-commerce providers has dropped to the lowest level, there are still professional e-commerce teams and good e-commerce projects available.
He emphasized that it is not Suning.com's core purpose to increase sales by merger and acquisition. The acquisition aims to enhance the company's control over platform partners and release the operation of non-core products to the third parties. This move will help improve user stickiness and increase traffic.