China’s third largest real estate developer Evergrande has launched an RMB20 billion (US$3.06 billion) joint venture with electronics retailer Suning to establish a network of shopping malls across large- and medium-sized cities nationwide.

The online/offline hybrid investment follows Suning’s December announcement of plans to increase its portfolio of shopping plazas within China from 20 to 300 malls by 2020.

The Suning-Evergrande joint venture puts the companies into direct competition with other major Chinese retail groups following similar models of development.

Alibaba’s Hema Fresh supermarket, which first opened in Chongbang Group’s Jinqiao International Plaza in Shanghai, recently announced plans to construct 100 shopping centres by 2019 in partnership with 13 commercial developers. Chongbang’s CEO and co-founder Henry Cheng Bing-chark said investments by online operators into physical stores has resulted in intense competition, admitting it has become a popular mode of operation among such retailers.

Since 2017, Alibaba and rival online giant Tencent Holdings have reportedly spent a total of US$10 billion between them on retail deals to extend beyond their virtual business lines.