×
143
Fashion Jobs
SAROJ JALAN
Marketing Strategist
Permanent · KOLKATA
ADD UR CO LLP
Production Manager
Permanent · Chennai
THE GLOBAL ZONE HR SERVICES
Production Manager/ Supervisor/ Incharge
Permanent · Pune
PUMA
Manager - Digital Marketing
Permanent · Bengaluru
THE BANYAN HR CONSULTS
Brand Manager For Leading Women's Wear Garments CO at Coimbatore
Permanent · Coimbatore
LEVI'S
Manager, Retail Merchandising (Ebo)
Permanent · Bengaluru
GLAN MANAGEMENT CONSULTANCY
Senior Buyer Lingerie (Knits Western Wear) - Retail Brand
Permanent · GURUGRAM
JOB INDIA
Asst. Manager E-Com Operations (Garments Retail) Gurgaon
Permanent · Faridabad
VASTRAKALA EXPORTS
Quality Manager
Permanent · CHENNAI
PEOPLE ALLIANCE WORKFORCE PRIVATE LIMITED
Manager / in Charge - Production/Quality/Cutting - Garments Industry
Permanent · Bhiwandi
MINT AND MILK COMMUNICATIONS
Senior Account Executive
Permanent · MUMBAI
PUMA
Manager- Buying (Apparel)
Permanent · Bengaluru
PUMA
Manager- Business Intelligence
Permanent · Bengaluru
PUMA
Manager- Trade Compliance
Permanent · Bengaluru
PUMA
Manager- Supply Planning
Permanent · Bengaluru
PUMA
Senior Manager - Performance Marketing- Marketplac…
Permanent · Bengaluru
PUMA
Regional Sales Manager- Mbo (South)
Permanent · Bengaluru
PUMA
Manager- Returns And Spf Operations
Permanent · Bengaluru
PUMA
Manager Merchandising
Permanent · Bengaluru
PUMA
Project Manager- Operations
Permanent · Bengaluru
PUMA
Manager- Logistics Operations
Permanent · Bengaluru
PUMA
Warehouse Manager-D2C
Permanent · Bengaluru
By
Reuters
Published
Jan 10, 2017
Reading time
2 minutes
Share
Download
Download the article
Print
Click here to print
Text size
aA+ aA-

Alibaba's new brick-and-mortar bet looks pricey

By
Reuters
Published
Jan 10, 2017

Alibaba shareholders are getting another serving of bricks and mortar. The Chinese e-commerce giant is upping its stake in struggling mainland department store and mall operator Intime Retail, teaming up with founder Shen Guojun to offer to take the firm private for $2.6 billion.

The bid for the remaining 63 percent of Intime carries a generous 52 percent premium to the Hong Kong-listed company's average price over the last 90 days. That's twice the average four-week premium for similar retail bids in Asia, Thomson Reuters data shows. Intime's beat-up shares soared 35 percent in response.


Alibaba's Jack Ma Reuters - Foto: Rueters


Full control, minus shareholder nagging, could allow Alibaba to boldly experiment with "online to offline", or O2O, shopping using Intime as a test bed. For example, instore customers could try out samples at a store, then order quickly and cashlessly for delivery using Alibaba's mobile apps. Conversely Intime can sell inventory online via Alibaba's platform.

The idea is similar to what Amazon is toying with its Amazon Go store concept, except that instead of a testing one prototype cafe, Alibaba is buying 29 department stores and 17 malls, most in Zhejiang province where Alibaba is headquartered.

For all the hype about China's online revolution, more than 80 percent of physical products are still sold at stores, not websites. Alibaba can hardly get much more dominant on the domestic internet, but if the boundaries between physical and e-commerce are really as blurry as it claims, this could open up a new avenue of growth.

But Chinese retailers struggle with many costs that O2O can't fix: stratospheric rents for desirable locations, for example. Culture is a challenge too, since many young Chinese honestly prefer shopping on screens, and are unwilling to pay a premium to buy in person. First-half earnings at Intime fell 21.3 percent year-on-year to 561 million yuan ($81 million). Alibaba's investment in Suning, another physical retailer, is under water. And it is not clear why Alibaba needs to buy a retailer, rather than enter into commercial agreements, for this experiment.

Customer demand for O2O concepts has yet to be thoroughly tested; it could be the Next Big Thing, or a niche. If Alibaba is wrong, shareholders are left with expensive stores stuck in a losing battle with Alibaba itself.


 

© Thomson Reuters 2022 All rights reserved.