• by Thom Forbes  @tforbes, May 11, 2015

Alibaba, the Chinese e-commerce juggernaut, has acquired a more than 9% stake in the Seattle-based online retailer Zulily, it disclosed in a Securities and Exchange Commission filing on Friday, a day after it elevated COO Daniel Zhang to the CEO position as it seeks to expand its presence in global markets.

“Alibaba framed the appointment of Mr. Zhang … as part of a wider effort to bring younger leaders into the company, even though Mr. Zhang, age 43, is only a few years younger than Jonathan Lu, whom he is succeeding,” write Juro Osawa and Gillian Wong for the Wall Street Journal. “Others who were set to start handing over responsibilities starting Sunday include executives who oversee technology, risk, strategy and marketing.”

Zhang “speaks nearly fluent English, is ‘analytical and numbers driven,’ and he has a good grasp of the mentality of U.S. investors thanks to his previous experience at Shanda,” a former manager at Alibaba tells Osawa and Wong. It’s “unclear how Zhang’s role “would fit in with Alibaba founder Jack Ma, who is widely regarded as the main public face of the company at home and abroad,” they write.

“While Alibaba has little exposure to the U.S. market, its massive size and cash stockpiles could make it a formidable competitor against just about any major e-commerce player in the U.S.,” writes Ben Fox Rubin for CNET. “The company gained huge attention in the states last year when it launched the world's biggest initial public offering ever, raising $25 billion on the New York Stock Exchange. But, so far the Chinese retailer has taken just a few tentative steps in the country, opening the retail site 11 Main and investing $15 million in U.S. interior-design firm 1stdibs last year.”

In a note on Thursday, Wells Fargo's Matt Nemer and Trisha Dill projected that Alibaba “will soon be the largest retailer in the world, with much better returns and margins than the current leader: Walmart,” Business Insider’s Akin Oyedele reports.

Forrester Research analyst Sucharita Mulpuru tells the Wall Street Journal’s Serena Ng and Gillian Wong that the retailer’s relationships with thousands of vendors “could be valuable to Alibaba. Zulily, meanwhile, is in a vulnerable state after missing Wall Street estimates and could benefit from having a relationship with Alibaba, which has deep coffers, she said.”

Indeed, “Alibaba continues to focus on making investments in forward-thinking, innovative entrepreneurs that are developing leading products and technologies,” said Jennifer Kuperman, its VP of international corporate affairs, Bloomberg's Kristen Haunss and Spencer Soper report. “The Zulily team has a compelling vision for the future that is consistent with our investment philosophy.”

Zulily describes itself as “a retailer obsessed with bringing moms special finds every day — all at incredible prices. We feature an always-fresh curated collection for the whole family, including clothing, home décor, toys, gifts and more.”  

But its earnings report last Tuesday “drove a knife through its admirers’ hearts, significantly lowering its sales target for this year and acknowledging that a lot of the customers it acquired in 2014 were not so loyal after all,” Ángel González writes in the Seattle Times, who added that “Zulily is finding out that hell hath no fury like an analyst disappointed.”

But an analyst’s chagrin is apparently another investor’s opportunity, as Alibaba swooped in to purchase the plummeting shares.

Zulily’s stock has dropped “82% since its all-time closing high of $72.75 on Feb. 27, 2014, after a November 2013 initial public offering,” report Bloomberg’s Haunss and Soper. “The stock dropped to a record low close of $10.82 on May 6 and then rebounded 23% in the following two days as Alibaba added to its stake,” which had been previously undisclosed.

“Alibaba’s investment deepens its connection to Seattle,” González  points out in another story in the Seattle Times. It previously “struck a deal with Costco Wholesale to sell its merchandise in China through one of its online sites, and it has partnered with online diamond retailer Blue Nile. It recently also established a software engineering office in Seattle.”

That’s all in line with Alibaba’s vision of not only “building the future infrastructure of commerce” global ecosystem but also being “a company that lasts at least 102 years,” which is good enough for most portfolios.