China’s leading e-commerce firm Alibaba and a Shanghai-based state-owned retail conglomerate today announced a rare private-public strategic alliance to push forward partnership for creating a new shopping scenario. “The strategic partnership will allow Alibaba to put its New Retail concept into practice, changing customer experience and efficiency of logistics and services,” Alibaba’s CEO Zhang Yong said on the company’s tie-up with the Bailian Group. It is rare for Chinese-state run firm to tie up with a private-owned company for business expansion.
The alliance does not involve capital ties at this stage, state-run Xinhua news agency reported today.
Bailian Group is a state-owned enterprise in Shanghai, China’s financial hub. Its main business covers department stores, shopping malls, outlets, large stores, supermarkets, convenience stores and specialty retail formats, as well as operating in non-ferrous metals, ferrous metals, automobiles, chemical lighting, electricity, timber and fuel, etc.
It operates 4,700 stores in more than 200 Chinese cities.
Zhang said the two parties had reached a consensus on creating a new shopping scenario, using big data.
In a bid to reshape the retail landscape, China’s e-commerce companies such as Alibaba have been strengthening their presence in offline retail channels. Jack Ma, Alibaba Group Founder and Executive Chairman, said the partnership will trigger a reform in the retail industry. It will integrate online and offline business to combine tradition and innovation.
Alibaba’s previous venture in offline retail include its share-swap deal with Suning Commerce Group and a privatisation deal to merge with brick-and-mortar retail chain Intime.
Ye Yongming, chairman of Bailian, said traditional retailing requires technology to provide consumers with new shopping experiences anytime and anywhere.
Consumption contributed 64.6 per cent to China’s GDP growth last year, as the country moves from an export and investment-driven growth model into one that draws strength from consumption, innovation and the service sector.
Retail sales rose 10.4 per cent in 2016, slightly down from 10.7 per cent in 2015, the National Bureau of Statistics said.
Shanghai-listed Bailian shares rose by the 10-percent daily limit Monday to 17.82 yuan (2.6 USD) on news of the announcement.