Alibaba Group Holding Ltd. (NYSE: BABA) has introduced the e-commerce platform to China, and now the innovative internet giant wants to transform the old fashioned of brick-and-mortar retail. Alibaba, in a $2.6 billion bid, wants to acquire department store chain Intime Retail Group Co. the founder of Alibaba, Jack Ma, has talked previously about creating a new model of online and offline retail. Ma’s company is built on innovation, and has a decade of experience as well as strong ties with the Chinese government.
Catherine Lim, an analyst with Bloomberg Intelligence in Singapore, explained, “Physical retail in China is backwards compared to elsewhere… It’s going to be a root-and-branch effort to get the offline side up to standard, and that’s probably why Alibaba felt the need to take it over totally… The players have started to modernize, but it’s been very slow. The truth is that the technology and software is there, it’s whether the people were willing to adapt to it.”
Anson Chan, a Hong-Kong based Daiwa Capital Markets analyst, explained the possible transformation that Alibaba might want to pursue. “What’s possible is that Alibaba wants to develop the O2O model and system through this partnership and, once it’s perfected, open up that system for others to use as a platform, like its cloud business,”