Find out about the retailer's strategic priorities, commercial focus areas, channel and country presence.

See data on the retailer’s performance and forecasts for its operations by channel.

This in-depth guide to China explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

We review Alibaba's current performance, its growth forecasts for the next five years, plus progress against key strategic objectives.

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Ant Financial, an Alibaba subsidiary and the operator of AliPay, is acquiring a UK based money transfer company WorldFirst for more than £500m (US$640m).

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Alibaba Group Holding Limited announced its financial results for the quarter ended 31st December 2018.

Growth driven by technology

The company had another strong quarter. In the press release, Daniel Zhang, CEO of Alibaba, commented that “Our resilient operating and financial performance is a direct reflection of our persistent focus on better serving our growing base of nearly 700 million consumers across retail, digital entertainment and local consumer services. Our growth is also driven by the power of Alibaba’s cloud and data technology that helps expedite the digital transformation of millions of enterprises.

Highlights of the group’s third-quarter performance are summarised below.

Strong top line figures

  • Turnover for the three months reached RMB117.3bn (US$17.1bn), up by +41YoY
  • Core commerce (Taobao & Tmall) revenue grew +40% YoY to RMB102.8bn (US$15.0bn), with 28% YoY growth for customer management revenue
  • Digital media and entertainment revenue up by +20%YoY, reaching RMB6.5bn (US$944mn)
  • Cloud computing revenue up by +84%YoY to RMB6.6bn (US$962mn), driven by increased spending from enterprise customers

Growing consumer engagement

  • Annual active consumers reached 636 million, up 35 million over the prior quarter, driven by successful user acquisition program such as referrals through the Alipay app. Notably over 70% of annual active consumer growth was from third and lower tier cities
  • Mobile monthly active users (MAUs) increased by 33 million from the previous quarter, reaching 699 million

Other business highlights

  • Consumption growth remains strong:
    • Tmall physical goods paid gross merchandise value (GMV) up by + 29%YoY, exceeding forecast by China’s National Bureau of Statistics
    • The growth was driven by fast-moving consumer goods (FMCG), apparel and home furnishing categories
  • New retail redefines the future of physical stores:
    • Freshippo (formerly Hema) now has 109 stores, with strong same-store growth
    • Around 470 Sun Art stores enabled with New Retail technology
  • Logistics keep driving engagement:
    • Ele.me (on-demand food delivery platform) and Koubei (online restaurant and local service guide) are combined to provide better service and better value for local customers
    • Cainiao processed over 1 billion delivery orders during 11.11
  • Encouraging Lazada performance
    • Alibaba’s Southeast Asia ecommerce platform Lazada also showed good growth in GMV. The upgraded Lazada’s technology resulted in increased number of active users and better engagement of Lazada’s mobile app

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RedMart, an online grocery platform, was acquired by Lazada in 2016, but kept it as a separate business until now. It will be integrated into Lazada’s platform in March, allowing shoppers to buy both groceries and other products on Lazada in the same location.

Shoppers will need to download Lazada app

RedMart shoppers can continue using the existing app until 11:59pm on 14th March, before the migration happens. They will then need the Lazada app to continue grocery shopping from 15th March. Orders will be fulfilled by Lazada while orders with other sellers from the marketplace will be fulfilled separately.

Expansion outside Singapore

Lazada’s online supermarket plans will extend beyond Singapore. RedMart’s co-founder Roger Egan will lead Lazada's entry into online grocery shopping and delivery network across the region. The retailer will launch at least one more supermarket online in another city for the second half of this year.

What do we think?

We know that online grocery has huge growth potential in Asia, but the growth will vary in different countries, so retailers need to choose where they invest wisely. The competition is fluid and partnerships often drive growth into new countries. RedMart’s grocery experience in Singapore, coupled with Lazada’s strong network in Southeast Asia, puts the retailer is in a great position to expand into new markets.

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The ecommerce giant is launching a new technology that enables the blind and sight-impaired shop online.

“Smart Touch” technology

Smart Touch is a piece of silicone film that sticks to smartphone screens. The film has three textured touchscreen buttons that users can feel along the edges of the screen for commands such as “go back,”, “return to homepage” and “confirm”. The commands can be tailored, depending on the app. For example, when paired with Taobao app, the touchscreen buttons can represent “My Shopping Cart”, “Tmall Golbal” and “Tmall Supermarket”.

Smart Touch is a joint effort between Damo Academy, Alibaba’s $15bn global research program, and China’s Tsinghua University.

Source: Alibaba

Enabling digital accessibility

Smart Touch was not the first accessibility technology that Alibaba introduced. Last year, Taobao (Alibaba’s online marketplace) added Optical Character Recognition (OCR)  technology to its pages, enabling Taobao’s 300,000 daily active users who are blind to “read” texts on images.  

Images are becoming ever more important in the shopping experience,” said Wang Yongpan, the algorithm specialist that led the OCR upgrade. “A typical product page on the site contains about 40 images, and most product specifications and descriptions are often found within images, rather than typed out in plain text.”

Making the platform more user-friendly is high on by Taobao’s agenda. “If I had to do one thing this year, that would be to make Taobao simpler and bring [us] back to our original purpose,” President Jiang FanJiang said.

Taobao is making good progress in improving online shopping experience for the visually impaired. Its data shows that it takes less than a minute for a shopper who is blind to complete the shopping journey online, from searching the product to making the payment.  

 

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Colgate-Palmolive joins L’Oréal and P&G to make use of the ecommerce giant’s big data for better and quicker product development, whilst mitigating risks at the same time.

Colgate: the era of ‘Made for China’

Alibaba Group has teamed with Colgate-Palmolive to launch a new toothpaste aimed at male consumers. The use of big data reduced the development process from the normal 18 months down to only six months.

It was the first time that Colgate used big data for new product development. This product opportunity was identified from a Tmall consumer survey that was carried out last year.

"Many multinational firms just introduce popular foreign products to China," said Qiu Zihan, a senior manager at Colgate's innovation centre. "However, the era of 'Made in China' has ended and it is time for 'Made for China'.”

Alibaba and Colgate-Palmolive have signed an agreement to build a “consumer-to-business” innovation plant to make more new products that are based on consumers’ demand.


Source: IGD Asia

L’Oréal: a well-established partnership

L’Oréal has an ongoing partnership with Alibaba, which started in dates 2010. The scope of their partnership is increasing over the years with Alibaba providing more support and services.

Recently, L’Oréal extended its partnership with Alibaba’s Tmall Innovation Centre for a pilot project involving male-grooming, using consumer insights to drive product development and marketing strategies.

P&G: an unique O2O partnership

Alibaba and P&G has a partnership that covers several elements of Alibaba’s ecosystem, including Tmall, LST (Ling Shou Tong, a  retail management platform for convenience stores), Lazada, AliExpress and Cainiao (also known as China Smart Logistics Network).

Like Colgate and L’Oréal, P&G also use Alibaba’s data to reduce the product development cycle, creating products tailored to the Chinese market.

P&G’s fragrance shampoo range took only nine months to develop from concept design to launch. Its product design was refined at early stage using insights and consumer feedback, greatly reducing the risks usually associated with the process.

 

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