Report: Alibaba plans to invest in Chinese retail data firm
China’s largest e-commerce player is making a move that could strengthen its offline endeavors.
Alibaba Group will invest $486 million (U.S. dollars) for a stake in a Chinese big data firm focused on hotels and retail. The investment will support the e-retailer’s offline operations, according to Reuters.
According to the report, a filing to the Shenzhen stock exchange on Thursday revealed that Alibaba will buy a 38% stake in Shiji Retail Information Technology Co., via its subsidiary Alibaba Investment Ltd. The technology company provides software and data systems to retailers, such as Starbucks Corp., as well as hotel firms and entertainment companies.
The deal follows the lead of Alibaba subsidiary, Taobao (China) Software Co Ltd, which took a roughly 15% stake in Beijing Shiji Information in 2014. The move helped to bolster its online travel business, according to the report.
Alibaba’s newest deal coincides with the company’s “New Retail” strategy, which is focused on combining online and offline stores. According to Reuters, Alibaba’s new investment will enable the e-retailer to leverage big-data to “shake up China’s huge but stalling retail market.”
This is Alibaba’s latest initiative to boost its physical retail presence. For example, the company operated 25 Hema fresh grocery stores as of December 31, 2017. In November 2017, Alibaba formed a strategic alliance with Sun Art Group Limited, a leading Chinese hypermarket and supermarket chain with over 440 stores nationwide.
Overall, Alibaba has more than $10 billion of investments into brick-and-mortar outlets, Reuters added.
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Report: Amazon to launch delivery service that would compete with UPS, FedEx
Amazon’s newest delivery service could take a bite out of UPS’ and FedEx’s business in a big way.
The online giant is planning to launch a package-delivery service for businesses, according to CNBC, which cited the Wall Street Journal for breaking the story. Called Shipping with Amazon, or SWA, the service will pick up packages from its third-party sellers who sell via its website and deliver them to customers and put Amazon in direct competition with FedEx and UPS. Some experts speculated that the service could be extended over time to other businesses.
Amazon will launch its new delivery service in Los Angeles during the next few weeks, rolling it out to other cities around the United States during the course of the year, the report said.
“This makes sense as there are many urban locations where Amazon’s order volume is so great it justifies taking fulfillment in-house,” commented Neil Sanders, managing director, GlobalData Retail. “It is unlikely that Amazon will make a move on trying to service the American hinterland. Order densities and volumes, along with long travel times between deliveries, in many parts of the country do not justify such an investment.” (Click here for more.)
Despite the direct competition, UPS said it is still a partner of Amazon. “UPS continues to support Amazon and many other customers and we don’t make comments about their business strategies or decisions regarding their utilization of UPS services,” a UPS spokesman told CNBC.
The shipping service would be Amazon’s latest move to expand its logistics and delivery operations. Recently, it established its “Amazon Logistics” operation, a cross-border service currently available to sellers listing on the Amazon platform. The retailer also continues to develop its air freight solutions and services, and plans “to quickly introduce it to a large number of our sellers,” according to the Amazon Logistics website.
In 2017, Amazon announced it would build an air cargo hub in Kentucky, which will be home base for its leased air fleet of 40 Boeing cargo jets — a program it calls Prime Air.
Meanwhile, Amazon kicked off 2017 by dipping its toe into the freight forwarder waters — a move that allows the e-retailer to control shipments between manufacturers and distribution points.
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