Is Alibaba's Push Towards Brick and Mortar a Move Towards Amazon?
HANGZHOU, CHINA - Alibaba Group Holding, China’s massive e-commerce powerhouse, may be following in rival Amazon’s brick and mortar footsteps with its latest move. The company announced it has formed a strategic partnership with Bailian Group, one of the world’s the largest retailers by store numbers, in a greater effort to take on a greater portion of the globe’s physical retail market share.
According to a report by Reuters, the firms will initially be cooperating on supply chain technology that taps into Alibaba's wealth of data, later integrating the Alipay online payment service with Bailian Group's existing membership program. With a user base of near 500 million, Alibaba has previously noted its intention of tapping into China's entire $4.8 trillion retail economy and beyond, especially through the use of data-driven management tools for brick and mortar retailers.
News of the deal comes on the heels of Amazon making its own big announcements on physical retail stores. As we reported earlier this year, the company revealed its Amazon Go retail concept, where shoppers scan their mobile device at a turnstile, taking items off the shelf, and walk out the door with no other steps.
Reversely, Walmart has steadily been inching closer to Alibaba’s e-commerce territory, acquiring companies like Jet.com and Moosejaw, as well as recent moves to streamline, expand, and further integrate online operations.
Reuters reports that Bailian currently operates 4,700 outlets in 200 cities, including supermarkets, convenience stores and pharmacies—more than double the stores owned by the country’s staple retailers—Suning, Intime, and Sanjiang—combined.