Ecommerce giant Alibaba has signed a strategic partnership with supermarket operator Bailian Group as it seeks to merge online and offline retail.
The deal will integrate Alibaba’s almost 500 million active users with Bailian Group’s 4,700 supermarkets, convenience stores and pharmacies across China.
The two retail giants will leverage consumer data to integrate offline stores, merchandise, logistics and payment tools in a bid to create a better shopping experience for customers.
As part of the deal, Alibaba and Bailian will co-design offline stores using big data, AI and the Internet of Things to enable real-time services for bricks-and-mortar customers.
The deal is part of Alibaba’s ‘new retail’ strategy, which aims to make the distinction between online and offline commerce obsolete.
Daniel Zhang, CEO of Alibaba Group, said, “Our partnership with Bailian is an important milestone in the evolution of Chinese retail, where the distinction between physical and virtual commerce is becoming obsolete.”
“New retail reimagines the relationship between consumers, merchandise and retail space by leveraging mobile Internet and big data. It will upend the traditional manufacturing and supply chain, the connection between merchant and consumer, as well as the overall consumer experience.”
Ye Yongming, chairman of Bailian Group, said the partnership would, “redefine commerce and reshape the retail industry”.
“New retail is not just the convergence of online and offline worlds. It also means 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.”
Chinese consumers spent $681 billion on online retail in 2016, according to Forrester research, however, experts predict the growth in China’s mature ecommerce market will slow in the coming years.
Alibaba has been pushing into bricks-and-mortar retail for some time after buying a stake in Chinese mall operator Intime Retail in 2014. Last month the ecommerce giant lodged a bid to fully acquire the company.
Alibaba has been a key retailer behind the phenomenal growth in the sector with its annual retail extravaganza Singles Day continuing to drive online sales. Last year’s record-breaking event reported RMB 120.7 billion ($17.4 billion).