IBM to build e-commerce research labs for Chinese retailer Suning

IBM has reached a deal with Chinese electronics retailer Suning Appliance to build research centres in China and the US to develop e-commerce products for the company.

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IBM has reached a deal with Chinese electronics retailer Suning Appliance to build research centres in China and the US to develop e-commerce products for the company.

IBM, already a provider of internal management systems for Suning since 2005, will now help the Chinese company expand its e-commerce site and services, said IBM spokeswoman Harriet Ip.

As part of the plan, IBM will build an e-commerce technology centre in the Chinese city of Nanjing. Some of the products the centre will develop include applications to allow household appliances to connect with the internet and mobile handsets.

Online presence

Suning plans to hire 15,000 employees over the next three to five years to fuel its expansion into e-commerce.

IBM is also establishing a joint development lab with Suning in Silicon Valley. The planning for the lab is still in the preliminary stages, but it will also focus on developing e-commerce services, Ip said.

Suning made the deal as the company is aiming at a greater presence in China's burgeoning e-commerce sector. While Suning has 1,700 physical stores, the company has to compete with the likes of China's Alibaba Group, which operates two of the top online retail sites in the country.

Suning has launched its own business-to-consumer site, which now has a 2.4% market share, according to Beijing-based research firm Analysys International. In contrast, Alibaba's Taobao Mall has a 35.5% share.

Transformation

"There is no question that we live in a time of rapid change that calls for the transformation of organisations in many industries," said Frank Kern, an IBM senior vice president last week.

Suning's goal is to build an e-commerce platform that will better personalise the shopping experience, by recommending appropriate products and providing better search. Financial terms of the detail were not disclosed.

Suning could not be immediately reached for comment. The company's president Zhang Jindong said that his company was moving to a business model that could leverage both e-commerce and physical retail shopping.

"With this innovative business model, consumers, suppliers and businesses along with society can all benefit," he said.

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