Alibaba partners with retail chain to gain edge in O2O market

March 4, 2014 Leave a comment

Alibaba partners with retail chain to gain edge in O2O market

Staff Reporter

2014-03-01

Chinese e-commerce giant Alibaba Group has teamed up with several retailers in the real world as they further explore business models that connect online and offline operations, the Shanghai-based China Business News reports.

Alibaba announced on Feb. 26 a joint campaign between the mobile operations of its Taobao shopping platform and five retail chain operators for the upcoming March 8 sales.

A trial service will be introduced at one Intime City mall in Hangzhou during the campaign, the newspaper stated, allowing Taobao users to pay for their purchases by mobile phones instead of at the cashier.

“It is impossible for a retailer not to be involved in e-commerce related operations; we have to embrace e-commerce,” said an Intime executive. “Intime has its own shopping site and began working with Alibaba since last year to combine online and real-world shoppers.”

This will be the first time Beijing Hualian is taking part in Alibaba’s marketing campaign, the newspaper said. The Wangliu Mall is expected to be the branch involved in the March 8 event, while 16 others will also work with Alibaba in the future.

Wu Qian, head of Alibaba’s O2O (online-to-offline) department, said the partnership will connect online shopping options and those in the real world for users, so that they can also make purchases at bricks-and-mortar stores.

Sources told the newspaper that Alibaba also plans to work with operators in the areas of marketing, traffic, member database and payment services.

On the same day, Alibaba’s Alipay third-party payment service also announced a partnership with retail chains, offering discounts and bargains to users of its e-wallet mobile payment service at stores of seven convenience store chains.

Retail chains have been contemplating their options in online operations after feeling the impact of the rise of e-commerce in China during recent years, recording declining gross profit margin and a shrinking customer base. Alibaba’s move is being seen as an effort to establish close relations with users and acquire offline resources, since the group has not been successful in the O2O area.

With rival Tencent gaining ground in the mobile market with its WeChat app and investment in business review site Dianping, Alibaba is trying to compete in the battle by utilizing its mobile Taobao and Alipay products, the newspaper said.

 

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