There’s nothing “Koi” about Alibaba’s supermarket ambitions
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There’s nothing “Koi” about Alibaba’s supermarket ambitions

Chinese Ecommerce titan Alibaba is pushing into the offline retail world with a vengeance. In May, we got one of the more surreal demonstrations of that fact, as executives from various international seafood companies across 13 countries convened on Hangzhou, Alibaba’s hometown. Seafood is a big deal in Asia, but it wasn’t the only foodstuff present – meat and fruit and vegetables got a look-in too. Alibaba is using events like this one to find the “world’s best, freshest food,” for its growing retail empire.

Alibaba’s share price has risen by 14% over the last 30 days

graph 2505 alibaba

SOURCE: Yahoo Finance

May 11 marked Alibaba’s “global fresh food summit” – we have yet to learn whether it’s a one off or will become an annual event. Attendees included top brass from companies like Clearwater Seafoods, Thai Union Group, Vinh Hoan Corporation, Cargill, and Europe’s largest pork processor: Danish Crown. Alibaba saw the event as a way of spreading its “big plan” to increase “the quality of food on Chinese consumers’ dining tables.”

If any company has the acumen to accomplish this goal, it’s Alibaba. The company has become a retail expert operating in both the online and offline worlds. Although it originally achieved success by connecting business to business and business to consumer Ecommerce plays, the company’s supply chain now integrates Yiguo APP, Suning Fresh, RT-Mart, Hema, and Tmall – in other words, a collection of online and offline players all working together.

Alibaba Group CEO Zhang Yong spoke at the event, saying: "Today we not only have 600 million consumers with us, we also work with companies across many industries, from manufacturers to farmers, and brands to retailers, providing a route to consumers." He went on to detail how Win-Chain, a Chinese tech firm with a specialization in blockchain technology, will "serve as Alibaba's global fresh supply chain gathering platform, linking up with global fresh resources to become an important part for Alibaba's global distribution of fresh food." Yong, like many others, is hoping that the transparency and functionality of blockchain can revolutionise the way business works.

Yong also noted the continued popularity of seafood in China, stating that last September marked the first time that protein from fish and crustaceans eclipsed that from pork in the national diet. This makes plain the power of the country’s newly minted middle classes, and could prove problematic for the company’s supply chain. Yong that Alibaba “needs more good products to come to China.” He added that this would be a net positive for the Chinese people, saying: "I believe that the growing imports will be a very important national strategy for China as a whole, and it will also bring huge demand to the market."

Disclosure

Dominion holds Alibaba in its Global Trends Ecommerce Fund.


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The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.