China's appliance giant Suning Appliances announced it was planning to buy a nearly 28 percent stake in LAOX, becoming the Japanese electronics retailer's biggest shareholder. This will be the first purchase of a major stake in a listed Japanese company by a Chinese firm.

Suning will invest 800 million yen or 8.4 million US dollars to buy LAOX shares, at 12 yen per share. After the purchase, it will acquire a 27 percent stake in the Japanese retailer. Suning will also appoint two representatives to LAOX's board.

Suning has set two business targets for LAOX. First, to make LAOX profitable again in the next three years; Second, to expand LAOX's network in Japan and source household appliances from China by utilizing Suning's local resources to save costs.

Suning's chairman, Zhang Jindong, has an ambitious plan for the company's expansion. Earlier this year, Suning identified Hong Kong as the first destination. The company plans to set up ten stores in the region and move into operation by the end of this year.

Suning's purchase of LAOX counters its arch-rival Gome, which is China's biggest consumer electronic retailer. Gome on Monday also announced a fundraising plan, which involves selling convertible bonds to American private equity firm Bain Capital LLC and new shares to existing shareholders.

Based in the eastern city of Nanjing, Suning is China's second largest home appliance chain. It runs 800 stores in Beijing, Shanghai and other cities.

LAOX was founded in 1930. It has 10 stores selling appliances, computers, telecommunications products, animated games, toy models and musical instruments. It has been struggling to deal with a slowdown in consumer spending and price-cutting competition.