It seems that Alibaba Group Holding Ltd (NYSE:$BABA) is moving forward with its plan to open up more brick-and-mortar grocery stores. The Chinese e-commerce giant is opening up three more physical stores in Shanghai and Beijing.
Thanks to the addition, Alibaba now has 13 grocery stores in total, with more likely on the way. According to ZDNet, Alibaba is using its technology to help make the stores more efficient. “The launches were part of the e-commerce operator’s ‘Hema’, or ‘new retail’ strategy that was first unveiled in 2015 as a move to reinvent traditional supermarkets by marrying online and offline experiences.”
Additionally, the stores can be used as fulfillment sites for online purchases. When this happens, Hema employees will receive the orders, pack the groceries, and prepare them for delivery. Each location works around a 3-mile radius for deliveries, and promises that delivery will be within 30 minutes of placing the order.
As mentioned, Alibaba is leveraging its technology to make the stores more efficient. For instance, BABA is using its massive data set to help decide what fresh products to make available for purchase. Each store will be different based on local tastes, and its software will help drivers plan the most efficient delivery routes.
According to Alibaba, Hema shoppers make four to five purchases per month on average, and roughly 50 per year. Online orders represent about half of the total orders.
Daniel Zhang, the CEO of the company, commented, “We believe the future of ‘new retail’ will be a harmonious integration of online and offline, and Hema is a prime example of this evolution that’s taking place.”
On Wednesday, in a premarket trading session, BABA shares increased $1.90, or 1.24%. So far this year, Alibaba Group Holdings increased 76.86%, versus a 11.06% increase in the benchmark S&P 500 index during the same timeframe.
As of right now, Alibaba has a StockNews.com POWR Rating of A (Strong Buy) and is ranked number 1 of 63 stocks in the China category.
Featured Image: twitter
