Chinese e-commerce giant Alibaba is presently discussing a partnership with Cincinnati, Ohio-based retailer Kroger, New York Post reported earlier this week, citing sources. Representatives of the two firms talked a potential collaboration last month in China, with Alibaba later confirming that a meeting took place but downplaying its importance, saying the firm frequently explores new business opportunities, especially those that would allow it to expand internationally and translate the massive momentum it gained in its home country in the last two decades to a global stage.
The specifics of the talks remain undisclosed, though some industry watchers believe Alibaba is now looking to take on Amazon on the Washington-based tech giant’s home turf. While primarily an online retailer, the Chinese company already developed a checkout-free solution that allows it to operate stores similar to Amazon Go. Even though Amazon only introduced first such brick-and-mortar location earlier this week, Alibaba put the idea into practice last summer. A collaboration with Kroger could provide the firm with the reach comparable to that of Amazon or Walmart but would also seek to take market share from other U.S. retailers such as Target. One source cited by New York Post claims Kroger and Alibaba are already collaborating on an unannounced project spanning online and offline sales which may not have been directly related to the subject of their December talks, though its scope remains unclear. Some industry watchers are speculating that Alibaba may be trying to talk Kroger into accepting its mobile and online payment platform Alipay which overtook PayPal as the world’s largest such solution back in 2013.
Kroger’s stock has been on a decline ever since Amazon announced its Whole Foods purchase — the largest acquisition in its history — but started recovering once initial reports of its talks with Alibaba emerged this week, with the majority of investors seemingly being confident the retailer would be able to rival Amazon with the backing of one of China’s most valuable companies. It remains to be seen whether U.S. regulators will have something to say about the deal should Kroger and Alibaba attempt to materialize it, with trade-related tensions between Washington and Beijing presently being higher than they were in years.
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