Recently, Alibaba announced that it would launch Tmall Supermarket across China in several stages. It would invest 1 billion yuan (US$160.78 million) targeting consumers in Beijing in the first phase.
Tmall Supermarket is like an online supermarket, focusing on FMCG products and was only available to consumers in Jiangsu, Zhejiang, and Shanghai with fast delivery and discounted price. After adding all products from Tmall Supermarket to shopping cart, they will be packaged together and send in one package.
Besides Alibaba, Jingdong and Yihaodian are also competing for the actual market share of offline supermarkets while offline commercial supermarket companies were on the transformation to the online market. For example, Wal-Mart acquired Yihaodian and launched O2O service platform.
Tmall Supermarket uses the same day delivery service of Cainiao network in Beijing. By late July, data showed that sales of Tmall Supermarket in Beijing region grew by 740% year over year, of which 90% transaction volume was from the mobile client.
However, most offline commercial supermarket companies were reluctant to cooperate with Jingdong or Alibaba. The storage and purchasing capacities of large online markets and advanced logistics had a powerful hit on offline traditional companies. This year, Tmall put forward many important initiatives, including the duty-free shop project in China partnering with Shilla Group and King Power, who were the largest duty-free groups in South Korea and Thailand respectively. Compared with Tmall global and other online supermarkets, offline supermarkets didn’t have more competitiveness.
Also read: China Online Shopping Accounted for over 10% of Total Retail in Q1 2015