Suning Commerce Group will build a new logistics base in Fengxian, Shanghai, to support its growth in eastern China.

With an area of 250,000 square meters, this new project will be a regional management headquarters and distribution center which integrates procurement settlement, e-commerce, logistics, after-sales, customer services, and training functions for the company. The total investment in this project is CNY1.1 billion and it will be put into operation at the end of 2014.

This is reportedly another move for Suning to enlarge its O2O strategy. In February 2013, Suning formally transformed from a home appliances retailer to a comprehensive retailer, focusing on physical store retailing, e-commerce retailing as well as retail services. Along with the change, Suning enhanced its logistics base construction. So far, the group has 16 logistics bases under operation. By 2015, it expects to have 60 logistics bases and 12 automated warehouses across China.

Meanwhile, Suning said the investment in this new logistics base is also the result of government preferential policies. The company believes that the quality environment and supporting resources provided by the city will help Suning, which is undergoing a rapid transformation and development, achieve a healthy long-term development.

Financial terms of Suning's investment in Fengxian were not disclosed.