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Alibaba Is Building A Five-Story Physical Mall

According to a report by Chinese news source Caixin, the mall, which will be five stories high and housed at Alibaba’s headquarters in Hangzhou, will combine physical shopping with technology similar to its current brick-and-mortar Hema supermarket strategy.

By PYMNTS

Chinese eCommerce giant Alibaba is building a physical mall to meld the worlds of offline and online commerce.

According to a report by Chinese news source Caixin, the mall, which will be five stories high and housed at Alibaba’s headquarters in Hangzhou, will combine physical shopping with technology similar to its current brick-and-mortar Hema supermarket strategy.

Hema supermarkets have seen Alibaba fuse online data with physical stores, enabling visitors to shop for items with barcodes. After scanning said barcodes with a mobile device, users receive information about the products and recommendations for similar items. The barcodes work with Alibaba’s digital payment service Alipay, which can be used as a payment method at checkout.

The Hema retail stores also act as hubs to pick up items that were purchased online.

According to the Caixin report, the forthcoming Alibaba five-story shopping center is scheduled to open in April and will boast a 40,000-square-meter complex. Called the More Mall, the shopping experience will include virtual fitting rooms and technology-laden makeup testing mirrors, among other online and offline services. The brick-and-mortar space will also exhibit brands that can be purchased on Chinese online shopping website Taobao and will also be home to a flagship Hema supermarket.

Analysts project this move, along with the Hema store concepts, could make Alibaba a trendsetter for other online retailers who wish to tap into the vast number of Chinese consumers still shopping brick-and-mortar retail. China’s online retail market remains underpenetrated at just 15 percent of total retail market size, CNBC recently reported.

Additionally, the Hema app remembers purchase preferences and makes personalized recommendations based on shopping history. It uses location data to display a data-driven selection of fresh food for sale on nearby physical store shelves. Amazon is working a similar angle with its recent purchase of Whole Foods Market and integration of its Prime Membership program into the Whole Foods POS.