China Herald: Mixing online and offline retail does not work yet

Ben Cavender

Alibaba teamed up with brick-and-mortar retailer Bailian, in the latest effort to combine the best of two worlds. But while the idea seems to make sense, the results up to now have been meager, tells retail analyst Ben Cavender to Reuters.

Reuters:

The deal, which does not include any financial investment in Bailian, is the latest in Alibaba's still nascent efforts to capture a bigger share of the retail market as online sales growth slows.

It has also spent $4.6 billion on a minority stake in appliances retailer Suning Commerce Group Co Ltd, is leading a $2.6 billion bid to take department store and shopping mall operator Intime Retail Group Co Ltd private and has bought a stake in grocery chain Sanjiang Shopping Club Co Ltd.

News of the agreement sent shares in Bailian Group firms surging but analysts cautioned it may take several years before returns from using big data can make a significant difference to earnings.

"There is a big push right now across brands to try and figure out how to mix physical and online shopping but gains so far have been limited," said Shanghai-based retail analyst Ben Cavender at China Market Research Group.

The two firms will initially cooperate on supply chain technology using Alibaba's big data capabilities and will integrate Alipay payments with Bailian Group's existing membership program.

More at Reuters.

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