This is the latest in a string of investments and acquisitions by Alibaba to expand its physical retail presence as part of its so-called “new retail” strategy to combine e-commerce and offline retail. The company’s goal is to make it easier for users to move (and spend money) between brick-and-mortar stores and Alibaba businesses like Tmall and Taobao. For example, they may view products at pop-up stores and then order them on their smartphones for almost-immediate home delivery.

Ele.me, which will continue to operate under its own brand, is at its heart a logistics technology company. Founded in 2008, it utilizes its logistics system to provide services like Fengniao, an express courier for local deliveries. After the deal is finalized, Alibaba said that founder and chief executive officer Zhang Zhuhao (also known as Mark Zhang) will become chairman of Ele.me and special advisor to Alibaba Group CEO Daniel Zhang on its new retail strategy. Wang Lei, currently vice president of Alibaba Group,  will take over as Ele.me’s CEO.

In a press release, Zhang said “Under the leadership of its founder and management team, Ele.me has achieved leading market share in China’s online food delivery and local services sector. Our shared belief that New Retail will create more value for customers and merchants has brought us together. Looking forward, Ele.me can leverage Alibaba’s infrastructure in commerce and
find new synergies with Alibaba’s diverse businesses to add further momentum to the New Retail initiative.”

Bloomberg reported at the end of February that Alibaba planned to buy the rest of Ele.me’s shares from its other investors, including Baidu.

The deal deepens Alibaba’s competition with Tencent, in particular its own local services and delivery platform, Meituan Dianping, which was formed by a merger in 2015. Alibaba previously owned shares in Meituan Dianping, thanks to its investment in Meituan, but began offloading them soon after the merger with Dianping.

In a statement, Alibaba said Ele.me complements its affiliate Koubei, a platform that gives restaurants and stores a way to go online and reach more local customers.

“By combining Ele.me’s online home delivery services with Koubei’s consumer acquisition and engagement capability for a range of restaurants and service establishments, Alibaba will be able to offer an integrated experiences to customers both online and offline,” said the company.

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Source: TechCrunch

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Alibaba’s first investment came in April 2016 when it bought 51 percent of Lazada for $1 billion, and it added another $1 billion last summer to increase its equity to around 83 percent. With today’s news, Alibaba has invested $4 billion to date which it said will “accelerate the growth plans” and help further tie the Lazada business into Alibaba’s core e-commerce service.

There’s already been plenty of evidence of increased ties between Alibaba and Lazada. The latter began offering products from Alibaba’s Taobao marketplace across Southeast Asia last year, and Alibaba has replaced Lazada’s tech team leadership with executives of its own. The latest shakeup is the appointment of Lucy Peng as Lazada’s new CEO to replace Max Bittner, who was installed by former owner Rocket Internet back in 2012.

Peng, who is one of Alibaba’s original 12 founders, has been Chairwoman of Lazada and is executive chairman of Ant Financial, Alibaba’s fintech affiliate company. Bittner will remain involved as “senior advisor to Alibaba Group” and apparently involved in future strategy, including further international expansion opportunities.

Lazada has progressed significantly since Alibaba’s first investment — which came at a time when the business had been close to running out of money — but the reality in Southeast Asia is that e-commerce in the region is a loss-making industry with plenty of competition.

Amazon entered the foray last year, but it remains only in Singapore, while Shopee is a two-year-old entrant bankrolled by Sea, formerly Garena, which raised over $1 billion in a U.S. IPO last year.

Alibaba hasn’t just limited its Southeast Asia approach to backing Lazada. The firm also invested $1.1 billion in Tokopedia which competes with Lazada in Indonesia, Southeast Asia’s largest economy and the world’s fourth most populous country.

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Source: TechCrunch

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The firm announced today it has spent HK$22.4 billion (around US$2.88 billion) to acquire of 36.16 percent in Sun Art Retail Group, a Hong Kong-listed business that operates 446 hypermarkets across 224 cities in mainland China.

The deal makes Alibaba the second largest shareholder in the business, which has a market cap of over US$10 billion. Ruentex, the shareholder that sold to Alibaba, will retain a 4.67 share while French retailer Auchan Retail owns a dominant 36.18 percent.

The Information was first to report on the investment before it was announced on Monday.

The deal will draw inevitable comparisons to Amazon’s acquisition of Whole Foods for $13.7 billion this year, but that would be misplaced. The Whole Foods deal marked a major point for Amazon’s entry into physical retail, however Alibaba’s move into offline began years ago and this is only the largest part of that strategy.

Alibaba bought a 35 percent slice of department store operator InTime in 2014 and then gobbled up 20 percent of retail giant Suning for $4.6 billion in 2015, but it foot the pedal on the gas in 2017. In January, it snapped up the remainder of InTime and took the company private, while in May it invested in supermarket brand Lianhua.

The focus of these deals is to offer a bridge between online and offline commerce, both for users and retailers themselves. Alibaba believes that it can use the colossal amounts of data it picks up through its e-commerce and payment services to improve the consumer experience in-store, while also optimizing fulfillment and stock management. Beyond online services like Tmall for brands and its Taobao marketplace, it can also leverage Alipay — its mobile payment service with over 500 million users — and Cainiao, the logistics offshoot it recently took full control of.

“Physical stores serve an indispensable role during the consumer journey, and should be enhanced through data-driven technology and personalized services in the digital economy,” Alibaba CEO Daniel Zhang said in a statement.

“By fully integrating online and physical channels together with our partners,
we look forward to delivering an original and delightful shopping experience to Chinese consumers,” he added.

That’s already playing out. The Chinese internet giant operates its own hybrid store called Hema, where consumers can purchase items using unmanned payment checkouts or order them for delivery. Beyond a taste of the future, the store serves as an incubation lab where Alibaba can develop new ideas for retailers like Sun Art, InTime and Suning.

Alibaba’s new partners aren’t slouches, however. Auchan also operates unmanned payment kiosk services in China. Together, the three investors in Sun Art pledged to introduce “a new shopping experience to China’s 1.3 billion consumers.”

This retail convergence in China isn’t only being driven by Alibaba. Rival JD.com invested in Yonghui in 2015.

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Source: BBC

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The company has a running sales counter on its Alizila news website, which details the “gross merchandise volume” that it has fulfilled orders for so far. It’s currently just after noon in China and the company has already surpassed last year’s sales for Singles Day with nearly $18 billion USD in merchandise sold already, about $7 billion of which was sold in the first 30 minutes of the day.

The company reached $17.8 billion in sales by day’s end in 2016 so there’s plenty more orders to be made with just under 12 hours to go.

Singles Day, a Chinese holiday that’s sort of the single person’s response to Valentine’s Day, is, at its core, a day to treat yourself. Alibaba didn’t invent the holiday, but since 2009 they have come to draw the bulk of global attention for the mind-blowing sales they manage to pull off. It’s similar in theory to events like Amazon’s Prime Day, though the scope is much more expansive for Alibaba’s popular Tmall and Taobao online storefronts which offer a number of deals to entice shoppers.

Smashing through last year’s Singles Day sales will obviously be a great signal for the company which has been having a pretty great year already. Alibaba has more than doubled its stock price since this time last year, now sitting on a market cap north of $475 billion.

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Source: Techcrunch

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Alibaba’s Ant Financial affiliate launched the ‘smile to pay’ service in Huangzhou, the location of the company’s global HQ, where it is being trialled with KFC.

As the video from Ant below shows, the payment process doesn’t require a smartphone, assuming that the customer has already signed up for the Alipay app and enabled facial recognition. A 3D camera located at the point-of-sale scans the customer’s face to verify their identity, while there is a phone number verification option for additional security.

This trial is the culmination of a number of deals for Alibaba.

The company first showed off facial recognition technology at IFA in Germany two years ago when President Jack Ma showed off some basic capabilities, including the option to snap a selfie to pay. The options have advanced somewhat since then. Under the hood, Alibaba uses a technology called Face++ from Chinese startup Megvii, which raised over $150 million from investors that include Foxconn.

KFC was an obvious first adopter since Alibaba is an investor in Yum China, which operates the brand and other fast food franchises including McDonalds and Taco Bell in China.

Alibaba has been pushing its vision of the future of commerce, which it believes integrates elements from online and offline retail. It launched a cash-less store earlier this summer, and it operates 10 neighborhood stores in Shanghai which use a mobile app to optimize the customer experience.

It’s easy to see how ‘smile to pay’ fits into that strategy, while also boosting the popularity of Alipay. That’s important because it is closely rivaled by Tencent’s WeChat Pay — a payment system connected to China’s hugely popular WeChat messenger app.

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Source: Tech Crunch

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The voice-controlled Tmall Genie can be used to play music, run third-party apps and buy goods from the Chinese retail giant’s online stores. Like many such devices, it lacks a display.

At launch, it will understand only Mandarin and be sold in the company’s domestic market.

It will compete in China against devices already launched by Baidu and JD.com.

Tencent – China’s biggest technology company by market capitalisation – has announced it has a similar product in development.

In the West, Amazon’s Echo range of smart speakers compete against Google Home. Apple and Microsoft have similar products scheduled for release soon. And Samsung is readying a speaker of its own, powered by its new Bixby virtual assistant, according to a report by the Wall Street Journal on Tuesday.

Smarter shopping

Alibaba’s new product derives its name from the company’s e-commerce platform – Tmall – and during a demonstration in Beijing was used to order a delivery of Coca-Cola and buy credit for a phone.

Tmall allows local and international retailers to run their own virtual storefronts on its platform and says it is China’s third most visited shopping site.

“It clearly is an advantage if – like Amazon – you can pull consumers into your retail ecosystem with a smart speaker,” said Eden Zoller from the technology consultancy Ovum.

“But one thing we need to remember is it’s early days for this category, and there remain questions of consumer trust in using the digital assistants to buy goods, on a smartphone or smart home speaker device.

“By that, I mean both the security of the transaction and privacy concerns about how personal data is leveraged and shared.”

Alibaba has addressed these concerns in part by using voiceprint-technology to try to restrict purchases to recognised users.

In addition, it has built in support for Alipay, the company’s popular online payment system, which is similar to PayPal.

However, to begin with, the company is marketing the device as a “limited beta” release that will help provide feedback before it is ready to mass produce the item.

It will charge 499 yuan ($73; £57) for the product, making it one of the cheapest on the market.

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MoneyGram has about 350,000 outlets in nearly 200 countries. Ant Financial has more than 630 million users.

The takeover by the Chinese group will need regulatory approval from the US Committee on Foreign Investment.

The inter-agency committee reviews foreign acquisitions of domestic American assets on grounds of national security.

Eric Jing, chief executive at Ant Financial, said in a statement that the marriage of the two companies will “provide greater access, security and simplicity for people around the world to remit funds, especially in major economies such as the United States, China, India, Mexico and the Philippines”.

Ant Financial has a big market share in the online payments industry in China. The acquisition could help the company extend the lead as well as expand overseas, as competition is growing in China with rival Tencent’s WeChat payment system.

US-listed Moneygram’s shares rose by nearly 9% on the news. The takeover has been approved by MoneyGram’s board of directors.

Politics over profits?

Ant Financial’s shopping spree in the US comes against a backdrop of rising tensions between China and the world’s biggest economy.

Before he took office, then president-elect Donald Trump was questioning whether the US should continue its “One China” policy, sparking fury from Chinese state media. And during his presidential campaign, Mr Trump threatened to impose punitive tariffs on Chinese imports.

But Jack Ma, the founder and chairman of Alibaba, held a meeting with Mr Trump in December last year.

While President Trump has been critical of China, he said he had a “great meeting” with Mr Ma, who chose to float Alibaba on the New York Stock Exchange. The share sale in September 2014 was a record-breaker, as Alibaba raised $25bn in its initial public offering.

If the MoneyGram deal goes through, it will be Alibaba’s second acquisition in the US. Last year the e-commerce giant purchased EyeVerify in a $70m deal.

EyeVerify is a start-up based in Missouri, which uses biometric authentication technology for securing user’s online data and transactions.

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Source: BBC

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