The Vipshop homepage.

Chinese online discounter Vipshop Holdings has purchased brick-and-mortar outlets operator Shanshan Group for 2.9 billion renminbi, or $421 million at current exchange, the companies said Wednesday.

The acquisition was closed concurrently with signing and was paid in cash installments.

“We are delighted to have reached an agreement to acquire Shanshan Outlets,” said Eric Shen, chairman and chief executive officer of Vipshop. “This represents another milestone in our efforts to explore online and off-line integration in our core business.

“Through this highly strategic transaction, we will gain presence in the off-line outlet business in China, which further enhances our ecosystem and fortifies our leading position in China’s discount retail segment. We look forward to working with the Shanshan Outlets team and welcoming them to the Vipshop family.”

Headquartered in Ningbo in Zhejiang province, a port city located a three hours drive south from Shanghai, Shanshan Outlets operates five outlets in Ningbo, Taiyuan, Harbin, Zhengzhou and Nanchang. The company has another five outlets in the pipeline.

Vipshop was founded by Eric Shen and Arthur Hong in 2008 and is one of China’s leading flash sales discount operators. In its latest financial filings for the first quarter of 2019, the company reported revenue which grew 7.3 percent year-over-year to 21.3 billion renminbi on gross merchandise value growth of 11 percent to 33.8 billion renminbi.

The company’s number of active customers for the first quarter of 2019 increased by 14 percent year-over-year to 29.7 million.

“Going forward, we will continue to expand our market share in the discount apparel segment, further strengthening our leading position in China,” Shen said back in May.