HANGZHOU: Alibaba, the Chinese e-commerce giant, has a wide portfolio of interests, including cloud computing and entertainment, but now the company’s leadership team has revealed plans for it to expand into brick-and-mortar stores.
Among other subjects covered in interviews with Bloomberg on the 18th anniversary of the company’s foundation, Chairman Jack Ma, Vice Chairman Joseph Tsai and CEO Daniel Zhang outlined their thoughts about a new type of shopping mall.
Coming just a month after arch rival Amazon acquired Whole Foods Market in a $13.7bn deal, Tsai pointed to how Alibaba’s Hema supermarket chain doubles up as last-mile delivery fulfillment centres where goods can be delivered to customers within 30 minutes.
Alibaba’s new retail strategy already entails the aim of blending online and offline shopping at its Hema chain – for example, customers can order groceries via mobile apps and use barcodes to scan products for information – but Alibaba wants to adopt a similar model for shopping malls.
“In the mall context, you have similar ideas where the mall location should be able to serve both an in-store type of use case, but also if you don’t feel like going to the mall, you can order and if the mall is located near your home, we can deliver the items to your home,” Tsai explained.
“The mall type of thing will cover a lot more categories, a lot more products. It’ll be consumer staples, it’ll be apparel, it’ll be consumer electronics. We’re hoping to expand through the mall effort, into more categories,” he added.
CEO Zhang then expanded on how Alibaba plans to leverage its physical stores, which may involve partnerships rather than a wholly owned network, to meet last-mile delivery expectations.
“Today if you look at the volume of the packages generated from our platform, it is about 55m a day and we strongly believe that this can grow to one billion, some years later,” he said.
“The size of the retail business in China is about 30tr yuan ($4.6 trillion). The question is, how do you redefine smarter package delivery? You don’t have to get the package and fly it from one warehouse to another city for a 200km delivery,” he continued.
“You can deliver from the store nearby. It still creates a lot of new packages shipped, but very conveniently. So, today, all these logistics systems should be integrated into the commerce system.”
Data sourced from Bloomberg; additional content by WARC staff