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China's 'new retail' evolves

News, 22 February 2017

BEIJING: A strategic partnership between e-commerce giant Alibaba and the bricks-and-mortar stores of Bailian Group may herald a new era in Chinese retail if the ambitions of both parties are realised.

The intention is to leverage the power of big data to achieve integration between offline stores, merchandise, logistics and payment tools with the ultimate aim of elevating efficiency and overall consumer experience.

"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," said Alibaba chief executive Daniel Zhang.

But what Alibaba has termed 'New Retail' is not just about the convergence of online and offline worlds, added Ye Yongming, chairman of Bailian Group, which operates 4,700 malls, department stores, supermarkets and other outlets across 200 Chinese cities.

"It also means we need to be able to leverage technologies such as the Internet of Things, AI and big data to provide consumers with new and immersive shopping experiences across channels and product categories anytime and anywhere," he said.

"It is with this shared vision that our companies have joined forces in this strategic partnership to redefine commerce and reshape the retail industry."

Last year, Alibaba Group's Director of Big Data and Technology, Danfeng Li, explained to Warc how the business uses its consumer data expertise to understand China's shoppers and drive offline conversions.

He outlined a process of capturing first-party data from customer smartphones in the stores of participating offline retailers and linking it with third party data from Alibaba's own properties to create a holistic picture of the path to purchase.

These data models – built by behaviour, gender, age or any other target group – can then be used to formulate more effective advertising or provide retailers with the customer data necessary to make strategic decisions such as changing their store layout or increasing conversions.

This approach will form part of Bailian- Alibaba partnership, with the integration of customer data from both parties in order to enhance customer service capability through technologies such as geolocation, facial recognition as well as drive sales through big-data.

There are plans to make Alipay, Alibaba's online payments app, available at all Bailian stores, while Bailian's own Safepass and Bailian OK Card payments services will be integrated with Alipay.

Data sourced from Alibaba; additional content by Warc staff