Suning Commerce Group Co, the country's largest electronics retailer, and private-equity firm Hony Capital Ltd will invest $420 million in video website PPTV.com, a move that will help transform Suning into an Internet retailer and accelerate the reshuffle of the video website industry.

Suning will invest $250 million, taking 44 percent of PPTV.com and becoming its largest shareholder. The deal is the retailer's largest single investment, and it will be "strategic", said Sun Weimin, vice-chairman of Suning.

He said the combination of Internet retailing and an intelligent video website will facilitate Suning's goal of building up a cloud business model that integrates all distribution channels, product lines and customer bases.

Sun said that the two sides will provide platforms and content for upstream electronics manufacturers and content suppliers, building up a chain for over-the-top content. That refers to a system for the broadband Internet delivery of video and audio content, without a multiple system operator being involved in the control or distribution of the content.

The retailer's massive sales volume of more than 10 million television sets a year will also boost the business development, he said.

PPTV, founded in 2005, covers Internet terminals including websites, computers, mobile phones and iPads. It has more than 340 million active users, and it's the third-largest video application. On a daily basis, PPTV reaches 30.9 million viewers, according to IT consultancy iResearch.

"The online-and-offline merger is set to be a trend for the Internet industry, which is gradually moving from virtual services to real-life activities," said Vincent Tao, PPTV's chief executive officer, at a news conference on Monday.

PPTV may benefit from the collaboration by leveraging Suning's extensive offline presence and its leading position in the electronic appliances sector, as well as Hony's solid capital resources, according to a company statement.