Red Star Macalline Holding, which develops and operates China’s largest chain of home furnishing malls, is launching its own real estate agency, the president of the newly launched brokerage announced on Monday, according to local media reports.
Famous for its chain of furniture malls, Red Star Macalline plans to start its real estate network by opening 100 shops around Shanghai under the Macalline Aijia name within the next three months, according to an account by Shanghai-based news site thepaper.cn.
The agency initiative was announced just three months after Jack Ma’s Alibaba Group purchased a controlling stake in Red Star Macalline from Warburg Pincus for just less than HK$2.7 billion ($344 million), with the e-commerce giant choosing its veteran executive Feng Quanlin to head Macalline Aijia.
Building a Network in China’s Top Cities
After establishing its initial presence in Shanghai, the agency plans to expand to China’s three other top tier cities, Beijing, Guangzhou and Shenzhen, Feng said at an event to announce the new initiative in Shanghai, with further expansion into Nanjing and Hangzhou also in the programme.
The new property brokerage will also look into opportunities to establish branches in Zhengzhou, Hefei and other provincial capitals. Red Star Macalline chairman Che Jianxin said that the company will operate 80 percent of its stores directly, with franchise outlets comprising the remaining 20 percent.
Red Star Macalline, which last year ranked as China’s second largest commercial developer behind Dalian Wanda Commercial with RMB 15.74 billion in revenue, says that despite coming late to the real estate brokerage business, the company has an advantage over its competitors due to its parent company’s expertise in the property business.
Che pointed out that the group’s Red Star Real Estate division, “sold RMB 45 billion in homes last year and, in the first half of 2019 sold nearly RMB 30 billion in housing.” First established in 2009, Red Star Real Estate is involved in commercial real estate management, property development and retail operations.
The company also says that it is counting on its resources in design, decoration and other home services to add value for its customers.
Alibaba Group Continues Offline Expansion
With Macalline Aijia led by Feng Quanlin, who formerly served as Alibaba’s regional managing director of rural business for western China, the Internet giant run by Jack Ma and Joe Tsai is venturing into yet another offline business.
After buying out Warburg Pincus’ stake in Red Star Macalline in May, Alibaba invested another RMB 4.4 billion in convertible bonds issued by the retail developer at a value equal to approximately an additional 10 percent share in the company.
Later that same month the two companies signed an agreement to cooperate more closely in the areas of retail, e-commerce, online payments and logistics.
Red Star Macalline was Alibaba’s second major investment in the home furnishing sector, after the Hangzhou-based company in February last year had invested RMB 5.45 billion to acquire 15 percent of Beijing-based Easyhome.
While promoting a strategy which Ma has called “new retail,” Alibaba has also invested in building a chain of omnichannel supermarkets named Hema (since renamed Freshippo) while the company also holds a 20 percent stake in appliance retailer Suning.