Amazon has moved into offline with the acquisition of Whole Foods. The ecommerce giant had noted the limit of ecommerce when it comes to grocery. With a physical store, Amazon can offer a better user experience to its customers than a business that relied solely on trucking grocery across cities.
Now Alibaba, the king of marketplace with focus on connecting buyers and sellers, is reportedly building a physical store. Alibaba does not typically own the inventory in its portal; it feeds on commissions from transactions executed on its platforms. This strategy of building a store is new and it is a big deal.
Alibaba, the operator of China’s largest online sales platform, is reportedly building its own mall as it seeks to enrich the real-world shopping experience with technology and convenience.
The five-story shopping center — which the company is calling “More Mall” — is located at Alibaba’s headquarters in the eastern Chinese city of Hangzhou.
The mall was built on a 40,000-square-meter plot of land and is scheduled to open in April, according to linkshop.com. Currently, construction crews are finishing up work on the building’s interior. —
Under the initiative, Alibaba is moving fast into offline spaces to help remake traditional retailing, including launching unmanned convenience store and bringing big data technology to 1 million mom-and-pop stores. Now, it’s building its first shopping center.
Walmart, the world’s largest retailer, has efficiently integrated its physical stores with its online operations. From Macy’s to Bestbuy, we are seeing companies capitalizing on their physical stores to deepen their competitive capabilities in the digital space. If that is the trend, I do think Jumia and Konga need to follow the bandwagon. Sure, they need to examine if that makes sense for them.
This is a way they can do this: build a store in each of Abuja, Lagos and Port Harcourt. The movers and shakers have said it:
“Alibaba believes the future of New Retail will be a harmonious integration of online and offline,” said Daniel Zhang, CEO of Alibaba Group, in a statement in July.
I will not call it New Retail; I will call it Hybrid-Commerce or h-commerce for short. Of course, someone might have used the same term. But that is the way I see it. I do think the interface of the meatspace and internet will help companies like Konga and Jumia compete in the Tier 1 cities in Nigeria. If the pioneers of the sector are moving to h-commerce, I do think they need to do so. This is the era of h-commerce. It is ON.
A hybrid commerce business is one that sells both online and offline. The primary purpose of the business is retailing. It will fuse the meatspace and the ecommerce drawing on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems.