Alibaba Constructing A Mall In China In A Bid To Transform Physical Retail

Reports indicate that Chinese online retail giant Alibaba is in the process of developing a high-tech physical mall as it expands its supermarket strategy known as Hema. According to the reports the mall will be built in Hangzhou where the e-commerce giant has its headquarters. The mall will be seeking to meld brick and mortar with technology in the same way that Amazon is doing after it acquired Whole Foods Market.

Construction work of the shopping center is almost complete and the mall, which will sit on a complex measuring 430,000 square feet and is set to occupy five floors, is expected to be launched in April next year. Named More Mall, shoppers will have access virtual fitting rooms and makeup testing mirrors equipped with technology among other conveniences.

Flagship Hema supermarket

Brands which will be available for sale on Alibaba-owned e-commerce site, Taobao, will also be exhibited at the mall. The shopping center will also house Alibaba’s flagship Hema supermarket.

“We believe the future of New Retail will be a harmonious integration of online and offline, and Hema is a prime example of this evolution that’s taking place. Hema is a showcase of the new business opportunities that emerges from online-offline integration,” said the chief executive officer of Alibaba Group, Daniel Zhang, in a statement.

This is not Alibaba’s first experiment in integrating online retail and physical retail. Two months ago the Chinese online retail giant launched three more Hema supermarkets that were a mixture of offline and online retail. In these ‘click and mortar’ supermarkets shoppers have the opportunity to peruse items which bear barcodes. When these items are scanned using a mobile device, shoppers are able to obtain information concerning the particular product. Recommendations for similar products are also made.

Digital payments

Alibaba’s digital payments platform, Alipay, works with the barcodes and shoppers can also pay using the service at checkout. The click and mortar supermarkets also serve as hubs from where shoppers can pick up purchases they made online.

Alibaba has previously disclosed that the average number of purchases per month for customers who visit Hema supermarket is 4.5. Users of the Hema app have a conversion rate that is as high as 35%. In China e-commerce comprises about 15% of all retail activity and the goal of Alibaba is to gradually increase that figure while digitally transforming physical retail by introducing technologies that are used in online retail.

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