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Alibaba reportedly building its first mall in China, looking to revolutionize retail

Alibaba, a pioneer of Chinese e-commerce, is reportedly embarking on its first brick-and-mortar mall, as it seeks to enrich the real-world shopping experience with technology and convenience.

The five-floor center, to be called "More Mall," is being built near Alibaba's headquarters in the eastern Chinese city of Hangzhou, according to Caixin, a Beijing-based financial news group. Caixin first reported on the news on Tuesday morning.

The mall is being constructed on a 40,000-square-meter plot of land, Caixin said, and is scheduled to open in April.

Construction crews are believed to be finishing the building's interior.

This year marked the start of Alibaba's "new retail" era — a phrase the firm has seeded in its announcements. In essence it is a strategy to blend online, offline, logistics and data units across a single value chain, Alibaba founder Jack Ma said in February.

Under the initiative, Alibaba is moving fast into offline spaces to help remake traditional retailing, including launching unmanned convenience stores and bringing big data technology to 1 million mom-and-pop stores.

Alibaba will bring its "new retail technologies" to More Mall, including high-tech makeup-testing mirrors and virtual fitting rooms, according to linkshop.com, citing unnamed sources with knowledge of the matter. Alibaba unveiled these technologies in June in what it called a "New Retail Interactive Store," in a shopping mall in Hangzhou.

"More Mall" will boast several of Alibaba's brands sold via its online platform Taobao, as well as several other traditional retail brands. Hema, Alibaba's grocery store concept, is also coming to the mall, marking its first flagship store. 

Introduced in 2015, Hema was part of Alibaba's new retail strategy to revive traditional supermarkets. With a vision to mix online and offline shopping experiences, Hema rolled out an app that allows users to order groceries for delivery on their cell phone and use Alibaba-affiliated online payment platform Alipay to make purchases. Hema also has brick-and-mortar stores just like normal convenience stores, which allow customers to hand-select food and dine inside.

"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.

E-commerce currently accounts for around 15 percent of total retail in China. Alibaba's goal is not to make incremental progress on that 15 percent, but to digitally transform the remaining 85 percent, the company said in an online post.

With the new goal, Ma seems to have doubled down on a bet between him and Wang Jialing, founder of Dalian Wanda Group, China's largest commercial property developer, which operates shopping malls and movie theater chains throughout China.

In 2012, Ma told Wang the e-commerce sector will eventually "basically" replace traditional retail, though it will not be able to completely replace it. Under the terms of the bet, if online consumption has exceeded 50 percent of China's total retail volume in 2022, Wang would pay Ma 100 million yuan ($15.3 million). If not, Ma would give Wang the same amount.

In the US, Amazon is also encroaching on the physical world of retail — especially hurting grocery stores, after it bought Whole Foods.

There are no reports of Amazon constructing its own mall, though. At least for now.
 


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