According to Alibaba Group Holding Ltd, it is going to invest 28.3 billion yuan in Suning Commerce Group Co Ltd, yielding a cross-investment agreement that connects leading e-commerce company of China with one of the largest privately owned retailers in China.

In a joint statement, the two companies said that the alliance would merge their strengths in online and offline commerce.

For example, according to the companies, Alibaba customers could go to one of Suning's outlets in China for trying out a product prior to buying it on Alibaba's website with help of their smartphone. Suning would be working with Alibaba's distribution network for delivering products in even two hours. The company has long talked about its formidable logistics operation.

Leaders of China have gradually expanded a large development strategy known as "Internet Plus" aimed at combining online and offline industries.

The extensive brushstrokes of the Internet Plus strategy had been revealed by Premier Li Keqiang in the National People's Congress in March. Under this, the Beijing government has supported e-commerce industry of China in addition to the use of robotics and computerized manufacturing.

According to Zhang Jindong, Suning's chairman,"(The deal) signals a new trend in the Internet age: strengthening China's traditional industries by leveraging the power of Internet. It will also help transform China's manufacturing industry and broaden the global horizons of Chinese brands".

When it comes to Alibaba, the deal could support its competitiveness against JD. com, which is its main e-commerce competitor.