This weeks lead development in our  This Week in Supply Chain Tech series is highlighting an announcement from China’s leading online retail platform provider Alibaba announcing the intention to control what is considered to be China’s largest big-box retailer.

Supply Chain Matters This Week in Supply Chain Technology

Alibaba’s intent is to invest $3.6 billion in an effort to double the company’s equity stake in Sun Art Retail Group which operates upwards of 480 combination supermarket and department stores across China. This additional investment adds to the reported $2.9 billion investment in 2017. We the combined investments, China’s dominant online retail platform will own upwards of 70 percent of Sun Art.

The significance of this development is that SunArt Retail is considered to be a major retail competitor to U.S. and international based retail chain Walmart. Sun Art’s outlets reportedly represent Walmart or Costco like retail formats that sell a wide variety of products in a large footprint facility.

The move reinforces Alibaba’s intent to expand into physical brick and mortar retail that broadens the provider’s Omni-channel capabilities that integrates online and in-store customer needs.

According to a published Bloomberg report, the Chinese E-commerce provider has been responding to intensifying competition from food delivery services provider Meituan Dianping along with Tencent Holdings backed Missfresh.

Alibaba CEO Daniel Zhang reportedly has been shepherding a termed “new retail strategy” with the ownership of Freshippo, a supermarket chain of upwards of 220 stores  that combines a grocery store, restaurant and last mile food delivery capability.

Similar to other countries, the COVID-19 pandemic has motivated consumers to rely more on online outlets to secure food, groceries and essential products. By amassing more physical retail presence, online provider’s have additional options in providing integrated services and capturing customer loyalty.


© Copyright 2020, The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.