Alibaba Group Holding Ltd has formed a strategic partnership with Bailian Group, the largest retailer in the country in terms of store number, in a bid to increase the e-commerce giant's share in the brick-and-mortar sales using its big data capabilities, according to Fortune.
The report said that the deal was the latest move by Alibaba to take a bigger part of the retail market amid the slow growth in the online market.
Aside from this, Alibaba has recently acquired a minority stake, worth $4.6 billion, in appliances retailer Suning Commerce Group. It also led a proposed bid of $2.6 billion to acquire department store and shopping mall operator Intime Retail Group private after buying a stake in grocery chain Sanjiang Shopping Club.
According to the report, shares in Bailian Group surged following news of the agreement. But analysts warned that the returns from this effort will take years before the results can be seen on earnings.
"There is a big push right now across brands to try and figure out how to mix physical and online shopping but gains so far have been limited," Ben Cavender, a retail sales analyst at China Market Research Group, said.
According to the report, the partnership will make use of Alibaba's big data technology, in which Alipay payments and Bailian Group membership program will be integrated.
As the largest retail store, Bailian has 4,700 outlets in 200 cities which include convenience stores, supermarkets and pharmacies. Bailian has more than double the number of stores of Suning, Sanjiang and Intime combined.
With around 500 million active users, Alibaba is keen on developing data technology tools for retailers and brands to tap the country's $4.8 trillion retail economy.
According to Bain & Company, a consultancy firm, the country's e-commerce market is expected to grow at an average of 18 percent annually until 2020, compared with 35 percent in the last four years. Despite the phenomenal growth of e-commerce in the country, brick-and -mortar sales still account for about 84 percent of total retail sales in the country, the firm said.