Less than a year after Amazon made headlines with its acquisition of Whole Foods Market, another grocer and eCommerce retailer may be teaming up, CNBC reported.
Kroger and Alibaba have reportedly held early discussions about working together, according to a source familiar with the meetings. While Kroger executives did travel to China, the early-stage talks with Kroger have not been CEO-level. A partnership could send Kroger’s customers to Alibaba’s website to make purchases, and help the grocer achieve its goal of offering more general merchandise to compete with Amazon and Walmart.
The talks come as Alibaba has been making an effort to collaborate with U.S. and Canadian companies that may be interested in entering the Chinese market. Earlier this month, Alipay, the digital payment arm of Alibaba, partnered with French apparel brand Lacoste to enable Alipay acceptance in select U.S. stores. The eCommerce company is also in the process of rolling out its cloud services and payment products.
In China, Alibaba has already teamed up with local grocer Hema. Its 13 stores, based primarily in Shanghai and Beijing, operate on a hybrid online/offline model. Customers download the Hema app, use their mobile devices to scan product barcodes as they shop and then submit a payment from their Alipay digital wallets.
The eCommerce company also made a big offline commerce play with an HK$22.4 billion ($2.87 billion USD) investment in its home country’s top supermarket operator, Sun Art Retail Group, in 2017. The move came as part of a new pair-up with French retailer Groupe Auchan and Taiwanese conglomerate Ruentex to go after the $500 billion food retail vertical in China.
Alibaba will be adding its unique Big Data analysis to the company’s offline retail locations under the deal’s terms, as 85 percent of Chinese groceries are still purchased offline. Alibaba has also invested approximately $9.3 billion in brick-and-mortar stores since 2015 and launched many unstaffed shops in 2017.