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Alibaba (BABA) Eyes Retail Revolution, Partners with Bailian

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For the past few days, rumors regarding Alibaba Group Holding Limited 's BABA strategic partnership with Bailian Group have been doing the rounds. The duo has finally confirmed the speculation with an official announcement on Feb 19.

Bailian is one of the leading retail conglomerates of China with over 4,700 outlets across 25 provinces, 200 cities and autonomous regions in China.

Per the partnership, the duo plans to leverage on Alibaba's big data capacities to explore new retail opportunities across outlet design, technology research and development, customer relationship management, supply chain management, payment and logistics.

Alibaba has been shifting its focus to brick and mortar stores since last year when it invested $4.6 billion in electronics retailer - Suning Commerce Group Co Ltd. The company has also tied up with Intime Retail Group Co Ltd founder, Shen Guojun, in a 2.6 billion bid to privatize Intime and has purchased a stake in grocery chain Sanjiang Shopping Club Co Ltd.

Coming to the price performance, over the last one year, Alibaba has outperformed the Zacks Internet Commerce industry. It has returned 46% compared with the industry's return of 41.4%.

Alibaba's Broader Plans

The retail giant that gives tough competition to Amazon AMZN and ebay EBAY in Chinahas a broader goal of tapping China's massive $4.8 trillion retail space that includes both online and offline forms. Notably, offline retail currently constitute 84% of total retail sales in China despite the enormous growth of e-commerce over the last few years.

With this objective in mind, the company is working on the development of what it calls "New Retail" to bridge the gap between online and offline shopping using its big data capacity. It expects that the system will offer brick-and mortar retailers new ways to evolve across marketing, inventory and distribution networks.

The concept, still at a nascent stage, won't move the needle much from a financial perspective. However, it makes sense as the company is seeing sluggish online sales. It appears that it is gearing up well in advance in case the online retail industry faces a slowdown.

Alibaba Group Holding Limited PE Ratio (TTM)

Alibaba Group Holding Limited PE Ratio (TTM) | Alibaba Group Holding Limited Quote

Zacks Rank

Currently, Alibaba is a Zacks Rank #3 (Hold) stock. A better-ranked stock in the same space is Mercadolibre, Inc. MELI , carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Over the past 30 days, current year estimates for Mercadolibre have gone up 3.2%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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