Alibaba, Supermarket Walk Down Aisle in Joint Venture

A regional supermarket group has partnered with Alibaba to set up a new retail joint venture, continuing the e-commerce giant’s push to blur the distinction between online and offline shopping.

Jiangsu province-based Nanjing Central Emporium has signed an agreement with Beijing Yintai Investment Co. Ltd., a retail subsidiary of Alibaba Group Holding Ltd., to set up a new company, New Retail Development Co.

By cooperating with Alibaba, Nanjing Central Emporium “can facilitate the process of transforming into a ‘new retail’ supermarket group and take advantage of Alibaba’s offline businesses in Jiangsu,” the supermarket group said in a statement on Wednesday.

The new joint venture — which is worth about 30 million yuan ($4.5 million) with Alibaba holding 70% of the stake — will have first pick of any business projects in which the companies get involved from now on.

The new tie-up marks Alibaba’s latest effort to expand its presence from online to offline. It was reported in September that the company was building a five-story shopping center in the eastern Chinese city of Hangzhou.

This year marked the start of Alibaba’s “new retail” era — a phrase the firm has seeded in its announcements. In essence, the strategy seeks to blend online, offline, logistics and data units across a single value chain, Alibaba Executive Chairman 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 incubated a project called Hema, which rolled out an app that allows users to order groceries on a cellphone for delivery 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 eat inside.

Contact reporter Mo Yelin (yelinmo@caixin.com)