Alibaba Group Holding Ltd will be purchasing shares in Haier Electronics Group Co and Qingdao Haier Logistics Co. Citing a stock exchange filing, Bloomberg reported that China's largest e-commerce firm will be getting a 9.9% stake in the logistics unit and around a 2% stake in the white goods manufacturer Haier Electronics. The Business Dictionary defines white goods as "heavy consumer durables such as air conditioners, refrigerators, stoves, etc., which used to be painted only in white enamel finish." Although these appliances are now available in different colors, they are still referred to as white goods.

In a statement, Haier Electronics revealed that Alibaba will also be a subscribing to a convertible bond worth HKD 1.3 billion or USD 168 million that would allow it to increase its stake to 24%.

According to a Bloomberg report, the acquisition will enable Alibaba to build its distribution in the most populous nation in the world. Alibaba says 70% of the package deliveries are generated in China. The report said Alibaba Chairman Jack Ma is ramping up its transport service, aiming for a distribution network that has the power to reach any area in the country in one day. It is looking to setup the kind of scale and efficiency similar to other couriers like United Parcel Service Inc and FedEx Corp in the US, said the report.

The report said companies like Haier are bound to benefit with the rising income and urbanization fueling demand. Data gathered by Bloomberg showed that from an urban population of 200 million in 1980, the number grew to 710 million last year and consumption is driven by the higher pay that comes holding jobs in the city.

The news was apparently welcomed by investors as Haier Electronics increased 18% to HKD 22.05 per share in Hong Kong trading this morning. The stock of Haier Electronics has nearly doubled in value in 2013. Data gathered by Bloomberg also showed that since 2008 Qingdao Haier's operating income has gone up by over 25% annually. Haier Group was deemed as the largest appliance manufacturer in China. It acquired Fisher & Paykel Appliances, a New Zealand-based firm, last year in order to grow overseas and increase its manufacturing plants worldwide.