CHINA’S e-commerce giant, Alibaba Group Holding Ltd, has formed a strategic partnership with traditional bricks and mortar retailer Bailian Group to use big data to improve sales.
The state-owned Shanghai based high street retailer is the largest by store numbers to join forces with Alibaba in its new effort to capture a bigger slice of the retail market, reports Reuters.
The deal, which does not include any financial investment in Bailian, will involve initial cooperation on supply chain technology using Alibaba’s big data capabilities and will integrate Alipay payments with Bailian Group’s existing membership program.
As growth slows in online sales, Alibaba wants to capture more of the traditional retail space.
The company, which has an active user base of around 500 million, has already spent US$4.6 billion on a minority stake in appliances retailer Suning Commerce Group Co Ltd and is leading a US$2.6 billion bid to take department store and shopping mall operator Intime Retail Group Co Ltd private. The company has also bought a stake in grocery chain Sanjiang Shopping Club Co Ltd.
Bailian is a major bricks-and-mortar retailer, the company operates 4,700 outlets in 200 cities, including supermarkets, convenience stores, and pharmacies. This is more than double the stores owned by Suning, Intime and Sanjiang combined.
China’s e-commerce market is expected to average around 18 percent annually until 2020, according to consultancy Bain & Company. A significant slowdown from the average rate of 35 percent during the previous four years.
This is why Alibaba is hoping to profit more from China’s entire US$4.8 trillion retail economy by developing data-driven management tools for retailers and brands.