Alibaba Group Holding Ltd., China’s dominant e-commerce company, and its closest Chinese rival, JD.com Inc., separately reported last week on partnerships with grocery store operators, demonstrating the strong potential to sell more food online in China.
In one deal, Lianhua Supermarket Holdings Co., one of the largest Chinese grocery store chains, announced plans to sell about 18% of its shares to Alibaba Group.
“With the help from Alibaba, we will upgrade and digitize our 3,618 stores to serve the need of consumers from different channels, including store, online and mobile,” a Lianhua Supermarket spokesman said.
Alibaba previously has established strategic partnerships with several large retail chains in China, including consumer electronics retailer Suning Commerce Group, No. 2 in the Internet Retailer China 500, and department store operator Intime Retail (Group) Co. Ltd.
The collaboration between companies that got their start online and offline stores is becoming increasingly common in China. “Operating a pure e-retail business is already in the past,” Jack Ma, the president of Alibaba, said recently at a press conference. “The long-term growth potential comes from the emergence of a new form of retail, which integrates online and offline closely through an advanced logistics network.”
At the same time JD.com is working closely with the world’s largest retailer, Wal-Mart Stores Inc. to sell more Walmart products through JD.com.
Last week, Walmart opened a branded store on JD.com, one of a series of initiatives between the companies since Walmart took an equity stake of about 10% in JD.com last June.
JD.com already was selling products from two Walmart subsidiaries, U.S. warehouse club Sam’s Club and British grocery chain Asda.
In addition, JD.com’s fresh food delivery service, JD Daojia, uses Walmart stores to fulfill online orders in about an hour, including dairy products, fresh meat and frozen food.
In April 2017, the number of orders Walmart shipped through JD Daojia increased by 30.4% compared with March 2017, and sales increased by 42.5%. About 40% of JD Daojia’s online orders are now fulfilled by Walmart stores, according to Wal-Mart.
JD.com is No. 1 in the Internet Retailer China 500. Alibaba is not ranked in the China 500 because it operates online marketplaces and does not own the merchandise sold on its marketplaces including Taobao and Tmall, which account for the majority of online retail sales in China.Favorite