Macy's to Set Up China Online Store on Alibaba's Tmall Global

Alibaba Group Holding Ltd said it signed an agreement with the Chinese joint venture of Macy's Inc to set up the US retailer's store on its online marketplace, Tmall Global.

The deal makes Macy's the first US department store chain to join Tmall Global, Alibaba said on Wednesday.

Alibaba and its newer rival JD.com Inc have been trying to win deals with owners of popular US brands to cater to China's growing appetite for imported consumer products.

Macy's said on Wednesday that its joint venture, Macy's China Ltd, with Hong Kong-based retailer Fung Retailing Ltd would invest about $25 million over the next 18 months.

"No physical Macy's stores are planned for China at this time," Macy's said.

The company, which will own 65 percent in the joint venture, does not expect the store to have any "material impact" on its earnings in the year ending January 2016.

Macy's said it expected sales of about $50 million (roughly Rs. 324 crores) from China in 2016.

Separately, Alibaba reported its slowest quarterly sales growth in three years, sending its shares down about 8 percent to a record low.

Alibaba's shares were down 6.5 percent at $72.28 (roughly Rs. 4,700) in late morning trading on the New York Stock Exchange on Wednesday.

Alibaba also announced a $4 billion (roughly Rs. 25,987 crores) share repurchase programme over two years, aimed at offsetting the impact of its share-based compensation programmes.

The company's results come at a time when China's economy is expected to grow at its slowest pace in a quarter of a century. Adding to investor concerns, China devalued the yuan on Tuesday, guiding the currency to its lowest point in almost three years.

Edited by NDTV staff from original story by Reuters.