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Alibaba has expanded into South Asia through its acquisition of Daraz.

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Alibaba has reported a 58% increase in annual revenue (US$39,898m) for the fiscal year ending 31 March 2018.

Overall performance

Revenue from core online commerce (marketplace) activities rose 60% to US$34,120m and from cloud computing by 101% to US$2,135m. Digital media and entertainment sales rose 33% to US$3,119m.

The number of annual active consumers on Alibaba Group’s China retail marketplaces reached 552m, an increase of 98m from the 12-month period ended 31 March.

New Retail central to growth

Alibaba's Hema stores blend online and offline retail to provide a seamless experience for consumers. The retailer has been expanding quickly, having recently entered four new cities (Xi'an, Nanjing, Wuhan, Guangzhou) and extending its network to 46 stores in 13 across the country.

In FY2018, Alibaba added 17 new stores, and another 23 have opened in the first four months of 2018. Only in January, Alibaba announced that it would launch 30 new stores in Beijing before the end of the year. Hema recently unveiled 24-hour delivery service. Furthermore, Hema Cloud provides shoppers access to products that may not be present in a physical store.

See our Hema store visit report here.

Hangzhou hosts brick-and-mortar mall

Last September, Alibaba announced plans to open its first offline mall in China. The retailer opened its next-generation mall on 28 April in Hangzhou, next to company headquarters. It carries Hema Fresh, Taobao Select, Tmall International, Tmall Genie Future Store and Brookstone. The mall also features unstaffed checkouts, Alipay payment services and other technologies. 

Tmall and Taobao

Tmall recorded 45% year-on-year growth in physical goods sales, reflecting robust growth across all major categories including apparel and accessories, consumer electronics and FMCG. Artificial Intelligence (AI) drove user engagement on Taobao's app. Smart personal recommendations to engage users is redefining shopping experience. It has around 1.5m content creators who actively support the Taobao App through posts, videos and live-broadcast events.

International investment

Alibaba's cross-border platform, Tmall Global, trades with 18,000 brands from 74 countries and regions selling into China. Revenue from its international retail business grew 94% in fiscal year 2018. It has further integrated Lazada’s operations into the Alibaba ecosystem and has committed to invest a further US$2bn in (Lazada) Southeast Asia to drive growth.

Hema Fresh has introduced 24-delivery services in its 25 stores in Beijing and Shanghai.

Available for most products

Users of the Hema app who live within a 3 kilometre radius of a store can now get the same 30 minutes delivery service between 10 p.m. and 7 a.m. as well.

The new offering includes most items in the store, except for some fresh produce. Delivery time for cooked meals, which are a big draw for Hema, will be extended to 1 a.m.

Targeting midnight shoppers

According to Alibaba, over 80m users of its Taobao and Tmall ecommerce sites visit between midnight and 4 a.m., most of whom are women over 30.

We found that New Retail doesn’t only merge online with offline, but also connects day and night. There are definitely consumer demands that are specific to night time.” Hema CEO Hou Yi said.

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Walmart has debuted its first small-format supermarket in the southern city of Shenzhen.

Smaller store with optimised assortment

The size of the store is about 1,200 sq m, around 10 percent the size of a regular Walmart Hypermarket, made to better accommodate shoppers in residential areas.
The store stocks more than 8,000 items. Roughly 90 percent of items offered for sale in the store will also be available for purchase on

A high-tech store

The store uses a high-tech inventory system that helps associates locate products on their exact shelves, with the product-picking route allowing stores to provide delivery in less than 30 minutes to homes within two kilometres of the store.
Customers that visit the store are able to pay with their mobile devices via WeChat Pay.

A major step towards 'smart retail'

The new Walmart Supermarket aims to give customers an upgraded omnichannel experience with the strengths from both Walmart and According to a company press release, the supermarket’s soft opening day set a record for stores on the website, receiving more than 1,000 orders online. The fastest delivery was less than 10 minutes from the order to the customer’s door. 

It marks a major step towards the 'smart retail' trend that is taking root in China and sees retailers integrating online and offline experiences, such as Alibaba's Hema Fresh and's 7Fresh.

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