Alibaba Group Holding’s shares this year have declined and the total sales account for about 15 percent in the Chinese retail sales. Now, the Chinese e-commerce company is looking for growth from the remaining 85 percent offline retail market. For this, Alibaba is focusing on new markets along with new segments in current markets. In addition, last year Jack Ma introduced a retail framework called “New Retail,” that integrates online, offline, logistics and Big Data, especially in China.
According to the reports, Tmall which is one of Alibaba’s online shopping businesses will operate as a supply chain platform for small shops. This will help the company to reach out to 10,000 stores within the first year. These small shops will be backed by Tmall branding, marketing, store design and inventory management. These shops will include supermarkets which will sell fresh foods and will have a staff less grocery store. With this bold move, the main aim of the company is to boost its online sales by attracting more offline retail channels to use online wholesale marketplace.
Not only Alibaba, but its major rival JD too has announced to switch to offline retail sales. JD is aiming to become the supply channel partner to one million local stores in the next five years. The idea of switching from online to offline will benefit Alibaba as a large number of the population live in remote areas. They don’t have access to the internet and therefore, have to buy things offline. However, it will be a major challenge for the company as it has to have a strong logistics network and regional distributors services. According to reports, Alibaba is hiring on-the-ground personnel to help small shops in the transition. The shop owners have to be in touch regularly with individual suppliers during the shortage of any product and stock up.
As per the recent reports, Alibaba has a strategy to take this opportunity. For this, it will transform 10,000 mom-and-pop convenience stores across China into a vast network of Tmall.com brick-and-mortar outlets. The consumers can shop, pick up packages, make orders online or even apply and receive small loans. The company has already started with its plan to open such stores in the country.