Back in December we reported on the unmanned brick-and-mortar race heating up between the Chinese e-commerce behemoths, and Jack Ma’s Alibaba seems to be breaking away from the pack.
According to Axios, over the past year Alibaba has revamped about 1m mom-and-pop shops, along with about 100 superstores (AKA “hypermarkets”) across China to support their new digital retail initiative.
The renovations have transformed stores from brick-bound, offline vessels into state-of-the-art digitalized bodegas of the future — equipped with AI apps, foot traffic sensors, and, of course, Alibaba’s mobile-payment system, Alipay.
It’s called ‘New Retail,’ ever heard of it?
Around 42% of global e-commerce transactions took place in China last year.
Now, Alibaba’s wants to capitalize on China’s hyper-fragmented brick-and-mortar landscape, by making each business its own self-contained, AI-infused island, in which only their affiliates reap the profits.
Last year Alibaba paid $2.9B to acquire 36% of Sun Art Retail Group, which operate nearly 400 hypermarkets, giving their affiliates access to Alibaba’s customer insights, supply-chain management, and retail tech.
Where’s the West?
Aside from Amazon’s Amazon Go experiment, retail giants in the West have done seemingly little to keep up with the pack.
But, Alibaba believes their technology is the foundation of this new digital future, and that only businesses who buy in will survive.
And, if Western companies aren’t careful, they could miss the boat.