Leading Chinese e-commerce marketplace operator Alibaba Group Holding Ltd. announced today that it is taking a stake in Chinese department store operator Intime Retail (Group) Co. Ltd. Alibaba’s $692 million investment will provide Alibaba with up to a 35% stake in the retail chain through a mix of direct equity and convertible bonds.

Intime Retail operates 36 department stores in mainland China. In a statement to investors, Intime Retail says the investment will allow it to develop its cross-channel sales capabilities: “It is the common goal of [Intime] together with the Alibaba Group as its strategic partner to develop online-to-offline business and provide a more convenient and impactful shopping experience. The joint venture will explore opportunities for expansion of online-to-offline business relating to shopping malls, department stores and supermarkets in the People’s Republic of China so as to further the Group’s omnichannel strategy to be a leading consumption solutions provider.” “Online-to-offline” is a term Chinese retailers use to describe online marketing programs that drive consumers into bricks-and-mortar stores.

Alibaba says the investment will let it integrate elements of its Tmall.com marketplace site into stores, such as letting store shoppers access Tmall offers from their phones in InTime Retail stores. Tmall.com and sister site Taobao.com are the largest e-commerce marketplace sites in China with total combined 2013 sales of $245 billion, according to the newly released Internet Retailer China 500.

 “We see significant opportunities to extend our e-commerce platform to physical retail,” says Daniel Zhang, chief operating officer of Alibaba Group.

Alibaba group is currently pursuing an initial public offering on a U.S. stock exchange, and some analysts are projecting Alibaba’s IPO valuation at between $100 billion and $150 billion.

The e-commerce company has been investing in a variety of companies in recent years, including in the United States. Alibaba last year led a $200 million investment round in the U.S.-based ShopRunner, which provides two-day shipping services to consumers from a host of web-only and retail chains’ online sites for a $79 annual fee. ShopRunner also has pick-up points in some participating retailers’ stores. Alibaba also last year led a $50 million funding round in mobile app search engine Quixey, based in California’s Silicon Valley.

For more on Alibaba’s recent developments, look to the April issue of Internet Retailer magazine, available April 1 online, or subscribe for a free copy of the print edition.