Alibaba Group Holding Ltd., one of the biggest e-commerce companies in Asia, has struck a major deal with Amazon rival ShopRunner to help them expand into China.

The American online shopping service is set to use the Hangzhou-based Alibaba Group's domestic logistics infrastructure to launch their services in China later this year, according to Reuters.

Like Us on Facebook

Business observers see the move as a threat to current market leader Amazon.com, while providing Alibaba with a way to get US products into the China market. Although online retail only accounts for 7.9% of all commerce within China, Alibaba accounts for 80% of the figure, and a partnership with Alibaba is seen to give ShopRunner a big advantage.

ShopRunner, based in Conshohocken, Pennsylvania, launched four years ago and is a licensed online retailer of brands such as American Eagle Outfitters, Spanx, Neiman Marcus, Toys 'R' Us and Calvin Klein.

It offers two-day shipping and free returns to buyers at rates of a mere US$79 a year. With just over a million members, the company is still an upstart compared to giant Amazon, which recently expanded into its own drone delivery service in selected parts of the US.

In October last year, Alibaba acquired a 39% share of ShopRunner for US$202 million, and the two companies are now set to establish a joint brand in China.

ShopRunner Chief Strategy Officer Fiona Dias describes the move as part of a vision Alibaba has of a "frictionless global model where consumers can buy from retailers anywhere" and to stimulate a growing market in China for online shopping.

To facilitate this, Alibaba filed to go public in the US on Tuesday, to grant them a presence in the country in order to ship from ShopRunner's domestic locations to their final overseas customers, with the customer saddling the cross-border delivery fee.

The program is expected to be up and running before the fourth quarter of this year, according to Dias.

Tagse-commerce, ShopRunner, Amazon, Calvin Klein, American Eagle, Spanx, Neiman Marcus, Toys 'R' Us, Wal-Mart, Best Buy, online retail