China’s largest e-commerce company presides over a collection of online platforms—including Tmall; Taobao, similar to eBay; and the payment service Alipay—that together create one of the most sophisticated and lucrative online retail ecosystems in the world.
Alibaba has established itself as a global innovator in what it has dubbed “new retail,” the blending of digital into real-world shopping experiences with the goal of creating the best of both worlds. Alibaba’s Hema Xiansheng grocery stores (which translates as Freshippo in English) blend app-based services into a vibrant physical environment. The store itself emphasizes fresh ingredients from the regions near its more than 100 stores in 19 Chinese cities as well as items from around the world. The app helps customers learn about the provenance and the freshness of those ingredients, and it can be used to buy groceries for local delivery (within a 3 kilometer radius of the stores), and preorder meals for pickup or in-store dining. Payment also happens via the app. Some stores also offer customers the choice to opt in for payment via facial recognition. The data Alibaba learns about its customers’ buying habits helps it order more efficiently so it can reduce waste.
Alibaba is also using its Hema stores as a platform. In the summer of 2018, it made a deal with Starbucks so that the coffee giant could leverage Hema kitchens and its delivery network to offer coffee delivery to its customers. Alibaba has also offered the same technology underpinning Hema to other retailers, such as the Chinese big-box retailer Sun Art. Alibaba’s growing prowess in using artificial intelligence and machine learning has allowed it to extend its new retail experiments to hospitality, launching the Flyzoo hotel that brings some of these same ideas to lodging.
Alibaba’s dominance of retail is particularly evident on Singles’ Day, the annual anti-Valentine’s holiday that Alibaba co-opted in 2009 as an online shopping event; retailers offer huge discounts on Alibaba’s platforms and purchases—made via Alipay—are delivered as quickly as within two hours. The 2016 Singles’ Day was the biggest to date, generating $17.8 billion in sales, more than Black Friday and Cyber Monday combined.
Since its record-breaking, $25 billion IPO in 2014, Alibaba has started to invest in entertainment as yet another way to drive online transactions, handling the Chinese rollout of films such as M:I5, and the upcoming Ninja Turtles and Star Trek sequels. These and partnerships like one made with Steven Spielberg’s Amblin Entertainment are helping the company learn the ins and outs of Hollywood moviemaking as it begins its own foray into movie production via Alibaba Pictures.