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Alibaba Group announced financial results for the quarter ended 31st March 2019.

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Alibaba and Bailian Group are planning to open 500 Ego convenience stores in China this year.

New Retail convenience stores

The first store, which has opened in Shanghai, operates around 500 sq m and has six key areas: coffee, bakery, foodservice, fresh, grocery retail and leisure/dining.

About two-thirds of the store area is dedicated to fresh or foodservice, including coffee, bakery and hot meals. It features three self-checkout machines in addition to Alipay checkout and Bailian wallet.

With the store almost five times larger than a typical Japanese CVS, it is able provide a greater range of products and services and meet different shopper missions. The store will also double up as a ‘fulfilment centre’ for distributing products to even smaller stores that Alibaba and Bailian plans to launch.

Two Ego formats

Media reports suggest that Alibaba and Bailian have leased space between 20 to 30 stores in Shanghai for the Ego banner. They also planning to launch two formats: larger central outlets operating between 300 and 500 s qm, and smaller stores of about 100 sq m.

Alibaba and Bailian’s strategic agreement

Alibaba and Bailian signed a strategic cooperation in February 2017 and committed to working together on using big data and new technologies to develop New Retail concept stores. It also aimed to maximise Alibaba’s deep understanding of customers and Bailian’s bricks-and-mortar experience.

As Amazon rebrands Souq to its own name, UAE-based LuLu continues its expansion in the region and AliExpress prepares to launch Ramadam sale, we round up news from the region.

Amazon rebrands Souq

Almost two years after acquiring Souq.com Amazon has rebranded the site under its own name. Visitors to Souq, except those from Egypt and Saudi Arabia, are being redirected to the Amazon.ae site. The move means that shoppers will be able to choose Arabic as a language for the first time on an Amazon site.

Shoppers will be able to purchase from a range of more than 30m products, an expansion on the old range from Souq. The new assortment includes 5m products from Amazon US. Shoppers can pay for purchases in AED with local and international credit cards, while they will also be able to pay cash on delivery. The pace of delivery is also being improved, with shoppers able to get free next day delivery on orders over AED100 (about US$27), while same-day delivery will be available in parts of the UAE, although at a cost. Amazon Prime is not available, for now.

Retail Analysis subscribers can learn more about Amazon’s international expansion and development of Marketplace in our Strategic outlook for Amazon report here.

LuLu expands in Oman…

LuLu has opened its 23rd and 24th stores in Oman, as the retailer maintains its expansion across the region. The 23rd store was opened at the Mall of Muscat and is 21,400 sq. m in size, while the 24th, a 13,000 sq. m hypermarket, was added in Al Amerat in Muscat at the newly developed ‘Nujum Al Amerat Mall. The two stores stock a wide range, with a focus on fresh food, fruits, vegetables, dairy products, poultry, meat, and fish, while also having separate hot food and bakery sections.

…And investigates opportunities for logistics hub in Nigeria

Separately, the retailer has said it is looking into the possibility of establishing a sourcing and logistics facility in Nigeria to export local agricultural produce to its stores across the Middle East and Asia. Discussing the opportunity, LuLu’s chairman, Yusuff Ali MA, said: “We are interested to sign contract farming deals with local farmers and entrepreneurs to help supply fresh vegetables and fruits to our hypermarkets worldwide.

AliExpress prepares for Ramadan sale period…

AliExpress is said to be preparing to offer savings of up to 50% on a range of products for shoppers in Saudi Arabia and the UAE as part of a Ramadan sale. The week-long event will see deep discounts offered on certain products, with AliExpress running flash sales during the night to generate excitement. Shoppers spending over US$60 in the UAE and US$90 in Saudi Arabia will be able to receive express shipping for free.

…As online competition increases

Underlining the growing competitive pressures for retailers, and online retailers especially, in the Middle East, Mumzworld has announced it has received further funding to enable it to accelerate its expansion in Saudi Arabia. The company says that since its launch in 2011, the site has grown to be the ‘leading online marketplace for all things mother, baby and child in the region with more than 250,000 online products’.

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As AliExpress and LuLu launch new promotions, competition rises online and in grocery retailing more widely in the UAE we round up news from the region.

AliExpress celebrates anniversary in Saudi Arabia…

To mark its ninth year of operation in the country, AliExpress is set to launch an anniversary sale that will enable shoppers to enjoy discounts of up to 50% across a range of 100m products. The four-day sale period will also allow shoppers to try different fulfilment and delivery options. As part of promotion AliExpress is also helping a shopping event in Riyadh, which will see it open a pop-up shop to showcase a selection of AliExpress products, across home goods and electronics, and smart shopping options.

…As consolidation continues in UAE

As competition within the food delivery business rises in the UAE the market is consolidating around the largest companies. The latest development in the channel has seen India-based Zomato being acquired by the Delivery Hero Group for US$172m. The purchase will see Delivery Hero gain a further 1.2m orders and US$2m in revenue a month.

LuLu spotlights locally grown produce in Saudi Arabia

Building on the on-going trend in the region for countries looking to grow more at home, LuLu has launched a campaign under the tagline ‘From Our Land: Proudly from KSA’. The promotion will run at all its stores in the country and will put a spotlight on locally grown food products, especially organic items.

Adnoc sees positive shopper response in Saudi Arabia

The acting CEO of Adnoc Distribution, Saeed Mubarak Al Rashdi, has said its first service stations in Saudi Arabia are performing ‘above expectations’. The discussion comes after the company opened its first sites in Saudi Arabia during Q4 2018.

Choithrams CEO sees rising competition in UAE

As part of an interview with Arabian Business, Choithrams’ CEO, Rajiv Warrier, has said the local market has become ‘much more competitive… than it was a few years back.’ Warrier said the rising competition meant it was a great time to be a shopper, but was creating challenges for retailers. To compete Warrier said Choithrams would look to adapt its offer to meet the new demands from shoppers. From a channel point of view this is seeing it investigate opportunities within ecommerce, while it could also lead to it expanding further in Bahrain.

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Boxing Cat Brewery in Shanghai, owned by global beer brand Anheuser-Busch InBev, has partnered with the Tmall Innovation Center (TMIC), the market-research arm of Alibaba, to become the first company to make a craft beer tailored specifically for China.
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