---
title: "Alibaba Joins Hands with Bailian: A Marriage of Convenience?"
description: "Alibaba has designated 2017 as the strategic year for 'New Retail,' and Jack Ma has been touting its importance. Today, the target of Alibaba's partnership was revealed: Bailian Group, not RT-Mart as previously rumored. The two companies have been in talks for eight months, and their strategic cooperation will cover retail formats, omnichannel layout, payment, logistics, and membership systems."
author: "New Distribution"
publisher: "New Distribution"
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published: "2017-02-21"
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# Alibaba Joins Hands with Bailian: A Marriage of Convenience?

> Alibaba has designated 2017 as the strategic year for 'New Retail,' and Jack Ma has been touting its importance. Today, the target of Alibaba's partnership was revealed: Bailian Group, not RT-Mart as previously rumored. The two companies have been in talks for eight months, and their strategic cooperation will cover retail formats, omnichannel layout, payment, logistics, and membership systems.

**Click the image for details**
Alibaba has designated 2017 as the strategic year for 'New Retail,' and Jack Ma has been touting its importance. **Today, the target of Alibaba's partnership was finally revealed! The earlier rumor that Alibaba would join forces with RT-Mart turned out to be a mistake; the real partner after an eight-month courtship is Bailian Group!** In fact, the two sides have been in frequent contact in the past. At the end of 2016, Yiguo Fresh, invested in by Alibaba, took over 237 million shares of Lianhua Supermarket from Yonghui Superstores, becoming the second-largest shareholder of Lianhua Supermarket. Lianhua Supermarket is the listed platform for Bailian Group's supermarket business.
The latest news: Alibaba and Bailian Group have just officially announced a strategic cooperation at the group level, covering retail formats, omnichannel layout, payment, logistics, and membership systems, opening a new chapter for New Retail.
Scene from the signing ceremony of the strategic cooperation agreement between Bailian and Alibaba
It is reported that Alibaba's mobile monthly active users exceed 450 million, making it the world's largest mobile economy. Bailian Group, on the other hand, has over 3,300 stores and owns numerous department stores, supermarkets, and time-honored brands, including Lianhua Supermarket, Century Lianhua, Hualian Supermarket, Quick Mart convenience stores, No. 1 Department Store, Wing On Department Store, Oriental Department Store, and Wuliangcai Optical. It is China's largest state-owned commercial conglomerate offline.
Bailian Group launched iBailian last year, initiating its retail transformation
**What changes will this partnership bring?**
It will change the current shopping methods. **A typical innovation in shopping methods is 'see now, buy now.'** Before last year's Double 11, Alibaba's Tmall held a 'Fashion Gala' featuring 'see now, buy now.' During Double 11, our beloved Lin Chi-ling walked the runway in a trench coat, and whether you were at the event or in front of your computer or phone, you could enter the live stream, place an order immediately, and buy the same trench coat she wore, even snagging the 'original' one she had on.
Lin Chi-ling's 'original' trench coat was snapped up instantly
This new technology that connects online and offline is driving tremendous changes in China's real economy. Against this backdrop, Alibaba is striving to provide consumers with more convenient shopping methods, such as proposing to privatize Intime Retail so that Intime department stores can fully integrate with Tmall, bridging online and offline shopping.
With this strategic cooperation with Alibaba, Bailian will undoubtedly lead new shopping methods, **such as using Alibaba's VR shopping technology—Buy+—where you can browse all physical stores like Bailian, Intime, and Suning from your bed, and even experience 'personal customization' according to your preferences.**
Shop while lying on the sofa
If you want to buy groceries to cook dinner, open the Taobao homepage and it will automatically show the entrance to nearby Taobao convenience stores;
**Online and offline membership integration:** Selected items can be purchased at member prices via your Taobao account, and payment is made through Alipay; the store's picking and delivery system, transformed by Alibaba Cloud, automatically dispatches orders, and nearby convenience stores or supermarkets with stock deliver quickly; half an hour later, the courier rings the doorbell, and your ordered fruits and vegetables arrive, ready for you to cook a delicious dinner.
**Why did Bailian catch Ma Yun's eye?**
Bailian Group is a large state-owned commercial circulation conglomerate formed by the merger of the former Shanghai No. 1 Department Store Group, Hualian Group, Friendship Group, and Materials Group. It has a registered capital of 1 billion yuan and total assets of 30 billion yuan. The group covers all business formats for both consumer goods and production materials, directly or indirectly holding shares in five listed companies: Bailian Co., Ltd., Materials Trade Co., Ltd., Friendship Co., Ltd., First Pharmaceutical, and Lianhua Supermarket. Its business network is centered in Shanghai, radiating to 25 provinces, autonomous regions, and municipalities directly under the central government, with a total of 7,000 outlets.
**In Shanghai's mixed-ownership reform of state-owned enterprises, Bailian Group has always been regarded as a benchmark for reform. The proposed mixed-ownership reform path includes introducing strategic investment, improving quality, and expanding business. According to some brokerage research, both Ma Yun and Ma Huateng have held talks with the Shanghai SASAC on related matters.**
In terms of business transformation, Bailian Group's current chairman and president, Ye Yongming, has shown an open attitude towards the Internet, stating that we have entered a new era of 'model-driven consumption changes,' and the Internet should become the core technology for Bailian's future industrial development. **Subsequently, on May 19, 2016, Bailian Group launched the iBailian omnichannel e-commerce platform, initiating a comprehensive transformation towards omnichannel retail.**
Now, Bailian Group has over 3,300 stores in Shanghai. These stores are located in mature business districts and communities, which are 'scarce' resources. These mature business districts and community commercial properties mean full coverage of Shanghai's purchasing-power consumer groups. Through these stores, more valuable online-offline integration initiatives can be attempted. **For Alibaba, Bailian Group represents value as a traffic entry point and as a low-cost distribution channel.**
**Why is this called a marriage of convenience?**
Although the partnership between the two is a strong alliance, it is difficult to see strategic depth in this cooperation with Bailian. In essence, it is merely a tactical move. **Alibaba CEO Daniel Zhang said that if the two sides can explore a business model never seen before, something that is seemingly paradoxical, becoming a center for entertainment, shopping, and connecting consumers, then this path is the right one.**
Zhang's so-called 'right path' is clearly conditional. **First, both sides must explore a 'never-before-seen' and 'seemingly paradoxical' business model.** According to this statement, it should be a globally pioneering commercial invention, which is currently blank globally. But it seems that by the end of the press conference, this exploration is still a process, perhaps showing a slightly positive direction, but it is certain that no conclusion has been reached yet.
**First, in terms of respective investments, Alibaba faces greater pressure to drive traffic to Bailian. Second, Alipay payment and Cainiao logistics can be integrated, and Bailian's benefits should be reflected in its revenue.** For Alibaba, Bailian's role is to help complete the 'New Retail' dream. Among the 'Five New' concepts Ma Yun mentioned, the New Retail sector also includes Suning Commerce, Sanjiang Shopping, RRS, and Intime Retail. However, a difficult problem to solve is whether these business formats will open stores on Tmall or set up Cainiao logistics points in physical stores.
**Artificial intelligence, smart payment, IoT, logistics technology, and big data applications have once again become the main themes of this cooperation with Bailian,** but the degree of completion is unpredictable. What is worth congratulating for Bailian is that the cooperation begins with the addition of a logistics system, Cainiao, so consumers can enjoy home delivery in the future. But there is nothing to celebrate regarding payment, because many supermarkets not cooperating with Alibaba can also use Alipay, and specifically for Bailian, there won't be significant chemical reactions.
Alibaba is clearly not happy with the cooperation because, in terms of New Retail, the current partners are just the beginning. It will inevitably need to contact Carrefour, Wumart, Chaoshifa, and others. In short, you have to connect with all mainstream supermarkets in the market to be considered New Retail.
This partnership with Bailian is merely a step for New Retail; that is, to do new business, you must connect with offline retail entities. Even if it weren't Bailian today, it would be another supermarket member. Therefore, Alibaba's partnership with Bailian is just a 'marriage of convenience,' and both sides are prepared for it, only discussing 'cooperation' without involving capital.
**Do you think Alibaba and Bailian are true love or a marriage of convenience?**
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