- Simone Preuss |
Chinese online giant Alibaba is planning its own brick-and-mortar shopping mall, which is currently being built in Hangzhou in eastern Chinas, also the location of Alibaba's headquarters. The five-story mall is slated to open in April 2018, offering products from brands on Alibaba’s Taobao platform and elsewhere according to Beijing-based media group Caixin. Its name, however, is not very imaginative - the new mall is simply called “More Mall”.
All the more imaginative though is Alibaba's approach in entering the traditional, i.e. brick-and-mortar, retail market. With the help of retail technologies like virtual fitting rooms, high-tech makeup testing mirrors and barcode scanners, the Chinese company wants to interlink its offline and online businesses.
“Alibaba believes the future of New Retail will be a harmonious integration of online and offline,” confirmed Daniel Zhang, CEO of the Alibaba Group, in a statement in July.
According to Forbes, the company invested as much as 8 billion US dollars in brick-and-mortar retail in the last two years, with its aquisition of tech-based grocery chain Hema from department store chain InTime making up the lion's share. Then there is Tao Cafe, Alibaba's unstaffed chain of convenience stores, which will be featured along with a Hema flagship store at the new “More Mall”.
With its new business venture, Alibaba counters the Chinese e-commerce boom, which is slowly coming back down to earth with a growth of 'only' 20 percent instead of the 40 percent seen previously. Reason enough for the internet giant to cement its growth with solid brick-and-mortar projects. After all, 80 percent of all retail transactions are still taking place offline in China.
In addition, Alibaba invests in technologies like a variety of algorithms and machine learning techniques, which help in decoding and understanding the shopping behaviour of its customers. This data will be used for evaluating Alibaba's online and offline business, thus helping the company gain a critical advantage.
Alibaba is known for its vertical expansion; only in March of this year, Alibaba founder and chairman Jack Ma announced the company's first logistics and e-commerce hub outside of China in Malaysia, the so-called “electronic World Trade Platform” (eWTP). Bevor that, Alibaba invested in Kakao Pay, subsidiary of South Korean messaging giant Kakao, to expand its global reach.