Pairing Of Giants – Alibaba And Kroger – Could Reshape Retail

- Jan 30, 2018-

CINCINNATI – An alliance may be brewing between Kroger and Alibaba, China’s e-commerce behemoth, which could reshape retail as we know it.

Grocery and financial trade media have been reporting talks between the two retail giants since Thursday. Neither company has issued a statement about a possible arrangement.

Alibaba, the world’s biggest Internet retailer as measured by volume, operates seven online platforms, which include Taobao, AliExpress and Tmall.

Kroger, the second largest retail chain in the U.S. by revenue, operates 29 companies – including Fry’s, Harris Teeter, Kroger and Dillon’s – with a total of 3,825 stores that posted $27.7 billion in total sales for the third quarter 2017.

Merging the two companies’ online and offline operations would dwarf Amazon and connect Asia’s burgeoning middle class market with U.S. markets.

For an idea of Alibaba’s size, compare the e-commerce site’s $25.3 billion in Singles’ Day sales to the $11.62 billion combined total sales for the U.S.’ Black Friday and Cyber Monday.

Last June, Alibaba increased its stake in Lazada, an online shopping platform operating in Southeast Asia. Alibaba now owns 83% of Lazada, giving sellers on Alibaba’s platforms access to the 560 million consumers in Lazada’s region. China has a population of approximately 1.379 billion, while the U.S. population is 327 million.

Kroger also is reported to be negotiating the purchase of Boxed, an online retailer that sells in bulk. Boxed, which launched four years ago, has a distribution network that provides free delivery to 48 states in an average of two days.