China’s e-commerce leader Alibaba Group Holding is pushing further into bricks-and-mortar retail as it joins forces with Bailian Group to create a strategic partnership.
The deal will integrate Alibaba’s almost 500 million active users with Bailian Group’s 4,700 supermarkets, convenience stores and pharmacies across China.
Alibaba has also spent $4.6bn on a minority stake in appliances retailer Suning Commerce Group and is leading a $2.6bn bid to make department store and shopping mall operator Intime Retail Group private. It also bought a stake in grocery chain Sanjiang Shopping Club last November.
A financial investment has not been included in the deal but the retail firms will share big data and logistics to integrate online and offline shopping.
Alibaba referred to the partnership as ‘new retail’ to describe its aim to make the distinction between online and offline commerce obsolete, as internet users continue to migrate to mobile devices from desktop computers.
China’s traditional retail market has seen three years of continuous decline, most recently, the country's top 50 retailers reported a 0.5% in 2016.
"Traditional commerce needs to embrace innovation and change to thrive if they are to ride atop this new consumption trend,” said Ye Yongming, Chairman of Bailian Group.
"We need to be able to leverage technologies such as the Internet of Things, AI and big data to provide consumers with new and immersive shopping experiences across channels and product categories anytime and anywhere.”
