Alibaba buys into hotel tech firm with 2.81 bln yuan  

Alibaba Group rings the IPO opening bell at the NYSE on Friday, Sept. 19, 2014. (Photo: CNS)

(ECNS) – Alibaba Group Holding has bought 15 percent of Beijing Shiji Information Technology, a hospitality technology provider, for 2.81 billion yuan ($458 million). It's the company's first major purchase since the initial public offering (IPO) in New York on Sept. 19.

Alibaba buys 54.55 million shares of Shiji for 51.52 yuan ($8.3) per share. The investment will be made in cash and Alibaba will get one board seat after the purchase, according to a regulatory filing disclosed on Sunday. The deal is expected to close early next month.

The investment would allow Alibaba to access Shiji's big data in the hospitality market to develop its travel business, and channel hotel customers to its e-commerce website.

Established in 1998, Shiji has a dominant share in the Chinese mainland. It provides IT consulting services such as software that manages reservations, tables, billing, inventory and point-of-sale systems.

According to its website, 90 percent of China's five-star hotels use its products in nearly 6,000 locations, with clients including Grant Hyatt Hotels, Sofitel Luxury Hotels and Marriott International Inc.

Its Q1 2014 financial report shows its revenue swelled by 176.3 percent to 1.04 billion yuan ($167 million).

By making the investment in hotel information, Alibaba is eyeing the development of its cloud computing, which has become one of its core businesses.

"Alibaba's future investment will likely be in medical care and aerospace to build a cloud computing empire," e-commerce analyst Lu Zhenwang said.

Alibaba raked in about $2.5 billion by selling shares for $68 each in its blockbuster IPO.