SaveSave story

A Chinese initiative is setting the pace in retail

Prepared for delvery by China's Photo: AFP / Getty Images

With its $9.5 billion takeover offer this week for Chinese food-delivery juggernaut, Alibaba is pushing ahead with a massive advance into physical retail, a trend that U.S. rivals are only starting to follow.

Why it matters: Alibaba's offer for fits into its "New Retail" initiative, shaping the future of retail on a scale that makes it Amazon's true global competition.

The background: Alibaba is often compared with Amazon — its revenue is far smaller ($23 billion in its fiscal year ending March 2017, compared with Amazon's $178 billion for all of 2017) — but it serves many more customers; Alibaba's estimated user base is about 550 million in China alone. While that number grows, Alibaba is migrating into the 80% of shopping done in physical stores.

  • The company runs an upscale grocery chain called Hema, and bought 36% of Sun Arts Retail, the largest supermarket operator in China.
  • It previously invested $4.6 billion in Suning Commerce, China's leading electronics retailer, and bought the department store chain Intime.
  • By comparison, Amazon — with its purchase of Whole Foods and launch of AmazonBooks — seems to be lagging.

Alibaba already owns 60% of, the food delivery company, which operates in about 2,000 Chinese cities. Deepashri Varadharajan of CB Insights tells Axios that, if the buyout of the remaining shares is finalized, Alibaba will have an effective monopoly on Chinese food delivery, part of an exploding global industry estimated at more than $100 billon a year in sales.

The bottom line: The acquisition is part of Alibaba's massive horizontal integration of sectors that marry on-line and far-more-dominant physical shopping. Varadharajan says the tie-up is circular with the rest of Alibaba. "Alibaba established a symbiotic relationship with where users can tap into’s services using the Alipay app," she said.

Steve LeVine 12 hours ago
SaveSave story

The U.S. suburbs are hot again

The talk around the world is about the rise of the city. But in the U.S., suburbanization is accelerating, according to new Census data released today.

Data: Census Bureau, analysis by Jed Kolko at Indeed.com; Chart: Axios Visuals

What's happening: Since about 2011, the growth of the urban counties of large cities has been sliding. Population growth in their higher-density suburbs has been falling since 2015 as well. But, as you see in the chart above, lower-density suburbs had the highest growth among all places, and exurbs and small towns have also been on the rise, according to an analysis of the data by Jed Kolko, chief economist at Indeed.

Kim Hart 18 hours ago
SaveSave story

Sen. Cortez Masto: Safety is a key component of smart cities

Photo: Chuck Kennedy / Axios

Nevada Sen. Catherine Cortez Masto said safety has to be a key component of new technological advances as they transform U.S. cities.

Why it matters: Citizens' safety is a primary concern as technology marches toward replacing humans in a number of different functions in our cities, such as driving. New attention has been drawn to this this issue by this week's fatal crash involving an autonomous vehicle in Arizona.