Alibaba Group has entered into a strategic partnership with the Bailian Group, in a bid to improve profits from brick-and-mortar sales. The partnership will see the Chinese behemoth deploy big data so as to enhance the profit it generates from retail sales.
Meanwhile, the deal does not involve any financial investment on Aliababa’s part into Bailian. This is not the first time that Alibaba is leading a foray into retail though. Previously, the company had invested $4.6 billion so as to obtain a minority stake in appliances retailer Suning Commerce Group Co Ltd. The firm is also spending $2.6 billion in an attempt to buy department store and shopping mall operator Intime Retail Group Co Ltd private. It has already purchased a stake in grocery chain Sanjiang Shopping Club Co Ltd.
Meanwhile, this particular partnership will see Alibaba leverage Big Data to boost sales for the Bailian group. However, it may be several returns before the collaboration and the accompanying big data efforts yield tangible results in form of boosted sales. That said though, Bailian Group shares jumped up following news of the partnership.
Bailian and Alibaba will attempt to smarten up the former’s supply chain technology using the latter’s big data capabilities. What’s more, the Bailian group will also integrate Alipay payments within its existing membership program. So a win-win situation for all the parties involved.
With its latest push into retail, Alibaba is tapping into a market that has a net worth well in excess of $4.8 Trillion in China alone. Brick and Mortar sales still accounted for over 84 percent of total sales in China last year, despite a huge surge in online shopping. Alibaba’s move to join up with retailers in different fields, appears to have been prompted from consideration of these statistics, which clearly show that despite all the growth achieved by online portals, retail will be around in force for the foreseeable future.