Alibaba Group Holding has teamed up with Shanghai Bailian Group in executive chairman Jack Ma’s latest step toward shaking up old-fashioned retail with technology. Bailian is currently one of China’s largest supermarket and department store chains. Shares of the company surged to their daily 10% limit on Monday after the China Securities Journal reported on the partnership.
Alibaba’s chief executive officer Daniel Zhang wrote in an email statement, “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.”
The online wholesale supplier plans to help upgrade some of Bailian’s 4,700 store chains spread across China, integrating customer relations, payment, logistics and everything in between. The upgrades will be similar in nature to its previous joint ventures with electronics chains Suning Commerce Group.
Moving on from defeating eBay and Amazon in China, Alibaba now aims to transform the $4 trillion world of brick-and-mortar retail with innovations in data and technology. The partnership with Bailian is not the online retailer’s online foray into old-economy deals’ Alibaba holds the lead in a bid to buy department store chain Intime Retail Group for $2.6 billion.
Intime operates 29 department stores and 17 shopping malls throughout urban China. Alibaba’s strategy is to focus on offline-to-online commerce, connecting brick-and-mortar sellers with the internet. Co-founder Jack Ma aims to build a network that will allow stores and brands to monitor transactions as they happen so that retail outlets can place orders in real time, cutting out layers of distributors.
Besides Intime, Alibaba has invested in other retail operators, including Suning and Sanjiang Shopping Club to further its experiment in retail. The Hangzhou, China-based company will not take a stake in Bailian, but will integrate membership databases with the retailer and use facial recognition technology in order to improve consumer experience.