What's happening: Go arrived about five months after the appearance of such stores in China, where tens of thousands of shoppers have already tried them out. They are part of a dizzying transformation in which Chinese internet giants led by Alibaba are becoming online-offline behemoths, investing in or acquiring some 30 physical retailers in the nation since the fall, according to Sanford Bernstein.
"It would be like Amazon buying a stake in every major offline retailer in the U.S.," Bernstein's Bhavtosh Vajpayee tells Axios.
"Whoever gets their online and offline stories right will become a gravitational black hole sucking up everybody else."
— Vajpayee
- Walmart and Amazon are the leading contenders to play this role in the U.S.
- In Europe, it's not clear who has the inside track.
Driving the news: Like Americans, a majority of Chinese people shop in physical stores. About 850 million Chinese, or 60% of the population, shop in stores, according to a note to clients last month by Wells Fargo. E-commerce comprises just 16% of total Chinese retail sales.
Hence, Alibaba reckons it will grow the fastest and largest by merging with those stores. That's why it has spent $6.7b on brick and mortar since the end of 2016.
- It has focused on groceries, with its Hema fresh food stores, Sun Art, Sanjiang, Lianhua and the online grocery Yiguo.com.
- Alibaba has also invested in Easyhome, a home improvement chain, and InTime, a department store operator.
- This month, Alibaba bought out the remaining shares of Ele.me, a food delivery company.
JD.com has invested $1.5 billion in physical groceries, including 7FRESH, Better Life and Yonghui. It is a partner with Walmart in both China and the U.S. In China, they operate more than 400 stores.
Go deeper: Alibaba and Tencent vie to dominate Chinese supermarkets
