Chinese e-commerce giant Alibaba Group and online media company Sina have joined forces to explore social commerce and develop marketing solutions to enable merchants on Alibaba e-commerce platforms to better connect and build relationships with Weibo users.

The two companies will cooperate in the areas of user account connectivity, data exchange, online payment and online marketing, among other things, and will explore new business models for social commerce based on the interactions of the hundreds of millions of users on Weibo and on Alibaba’s e-commerce platforms.

According to Alibaba chairman Jack Ma, the alliance affirms Alibaba’s view of the vitality and importance of social media in unleashing value in e-commerce activities.

“We believe that the cooperation of our two robust platforms will bring unique and valuable services to Weibo users, as well as making the mobile Internet a core part of Alibaba’s strategy,” said Ma.

The alliance is expected to generate approximately $380 million in advertising and social commerce services revenues in aggregate for Weibo over the next three years.

Separately, Alibaba, through a wholly owned subsidiary, has invested $586 million to purchase preferred and ordinary shares representing approximately 18 per cent of Weibo on a fully-diluted basis. Sina has also granted an option to Alibaba to enable Alibaba to increase its ownership in Weibo to 30 per cent on a fully-diluted basis at a mutually agreed valuation within a certain period of time in the future.

“Weibo and Alibaba’s e-commerce platforms are natural partners,” said Sina CEO and chairman Charles Chao.

“Together we provide a unique proposition not only to existing online merchants, but also to individuals or businesses, who wish to offer products and services on social networking platform to take advantage of the traffic shift toward social and mobile Internet,” he said.