Alibaba deploying cutting-edge technology to China's 400 RT-Mart stores under 'new retail' model

By Lester Wan contact

- Last updated on GMT

As with Hema, orders placed through RT-Mart’s mobile app are fulfilled using store inventory then placed on conveyor belts (above) that carry the bags of groceries to be packed and delivered. ©Alibaba
As with Hema, orders placed through RT-Mart’s mobile app are fulfilled using store inventory then placed on conveyor belts (above) that carry the bags of groceries to be packed and delivered. ©Alibaba

Related tags: China, Supermarket, Grocery stores, Alibaba, Food, food retail, omnichannel, New Retail

Alibaba says it has already completed transforming a quarter of RT-Mart’s 400 China stores, equipping them with ‘new retail’ technology designed to bridge the gap between e-commerce and traditional bricks-and-mortar operations.

The company says a series of newly-added features will improve shopping experience, from in-store fulfilment of online orders to interactive kiosks, and the stocking a selection of popular products from Tmall, according to Alibaba’s blog, Alizila​.

“By digitising the store’s operation, the online and offline business merge into one. This will boost retailer’s online transaction volume,”​ said Peter Huang, CEO of RT-Mart.

This revamp falls within Alibaba’s broad strategy to build the technologies necessary to bring old 'retail' into the 21st century under the ‘new retail’ transformation, coined by founder Jack Ma.

Last November, in a US$2.88bn deal, Alibaba acquired 36% of Sun Art Retail Group​, which operates nearly 400 hypermarkets under the Auchan and RT-Mart banners.

Based on the agreement, Alibaba would share its technology with RT-Mart to expedite digitisation, synch its online and offline operations, improve its in-store layout and increase efficiencies in the grocer’s inventory management.

As part the digital transformation, RT-Mart gains access to Alibaba’s customer insights, supply chain management, retail technologies and electronic payments via Alipay.

New Retail shopping

One of RT-Mart’s new offerings, similar to that of Alibaba’s Hema retail offering, is a one-hour delivery for orders within a 3km radius. Like with Hema, orders placed through RT-Mart’s mobile app are fulfilled using store inventory, then placed on conveyor belts that carry the bags of groceries to be packed and delivered.

Moreover, delivery is available for in-store shoppers. By scanning the bar code on the items with the Mobile Taobao app, they can place the items in a virtual shopping cart, complete the transaction with Alipay and receive delivery at home in as fast as 60 minutes.

Another new addition is the Smart Mommy-and-Me corner, stocked with domestic and imported products for infants and new mothers. This is not surprising, considering Jason Yu, general manager, Kantar Worldpanel Greater China, told FoodNavigator-Asia that young mothers and families in China are spending much more on consumer goods than others​.

Here, there are also online shopping kiosks that allow customers to browse through Tmall and make their purchases by scanning a QR code with their mobile phone.

Focus on fresh

More than digitisation, RT-Mart is taking a leaf from Hema in its focus on fresh food, as Chinese consumers increasingly demand higher quality food as part of a growing healthier living trend.

At the upgraded hypermarts, customers can purchase products from Hema’s “daily fresh” programme — fresh meat, vegetables and dairy products are brought in and replaced every day to ensure that only the freshest items are available for sale.

This has been made possible by a joint purchase agreement between Hema and RT-Mart to source from the same suppliers.

New growth from New Retail

Thanks to the transformation, the volume of online orders at the revamped stores has increased significantly. At an RT-Mart in Shanghai, online orders climbed to 5,000 a day at their peak, compared to nearly zero prior to the collaboration with Alibaba.

The implementation of further technologies at RT-Mart is under discussion. Alibaba plans to complete the process of transformation throughout the remaining RT-Mart stores by the end of the year.

Shirley Zhu, programme director at IGD Asia, earlier shared that the future of grocery shopping is being reinvented in China​, where the boundaries between ecommerce, supermarket and restaurants are blurring.

“Facing rapid changes, the leading retailers are stepping up their efforts to build omni-channel capability, enhance in-store experiences and create differentiation,”​ she had said.

“All these measures will help retailers understand and serve their shoppers better, gain a stronger foothold in the market and tap into a larger customer base in the future.”

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