(Yicai Global) May 27 -- Global e-commerce giant Alibaba Group Holding has inked a deal with Red Star Macalline Group to integrate online and offline furniture retail after buying convertible bonds worth 10 percent of its new partner's equity.

Hangzhou-based Alibaba and Macalline penned a deal on May 24 to experiment with New Retail in a select few Macalline stores before fully rolling out the strategy once it reaches maturity, China's leading furniture retail chain said in a statement yesterday, without adding further details.

Macalline announced on May 15 that Alibaba had bought CNY4.4 billion (USD632 million) worth of convertible bonds in the Shanghai-based firm. The bills can be swapped for 355 million shares in Macalline, which racked up 15.2 percent of China's home decoration and furniture market last year and has already had a smart retail tie-up with web titan and Alibaba rival Tencent Holdings since October.

The pair plan build an e-commerce platform, logistics system and data-sharing network under their latest agreement, and use Alibaba's third-party payment app Alipay to upgrade Macalline's payment systems and offer finance deals to consumers.

Editor: James Boynton