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Mar. 27 (NBD) -- With Sun Art Retail Group Ltd.'s release of annual report for 2017 on Monday, China's e-commerce titan Alibaba Group's New Retail strategy was revealed.

"The combination of Alibaba's internet DNA, big data and data-driven technology together with Sun Art Retail's retail DNA, store management capability and high efficiency will lead to a positive chemical reaction that produces a new model of New Retail," said in a statement written by Zhang Yong, Non-Executive Director of China's hypermarket operator Sun Art Retail Group Ltd. and CEO of Alibaba Group.

Alibaba's New Retail model unveiled

Sun Art Retail will be guided by three core strategies in its New Retail transformation in 2018, which are digital transformation of storefronts; development of a variety of retail formats and a variety of distribution channels; and redefining the hypermarket model, Zhang said.

According to the report, following Alibaba's investment in Sun Art Retail, the hypermarket operator's RT-Mart stores started the New Retail transformation, including store digitalization, digital purchase management, supply chain upgrading, and big data marketing.

In addition, Alibaba brought T-mall Supermarket's products to 167 RT-Mart stores in 20 cities of East China in January this year. Moreover, all RT-mart stores have begun to offer home delivery services to consumers who live less than 3 kilometers away from the store. In the future, T-mall smart mother-and-baby rooms are also expected to open in RT-Mart stores. 

Give a fish or teach to fish?

A related person in charge told NBD that Alibaba aims to teach a man to fish instead of giving a man a fish. 

The person further explained that as a pioneer of the New Retail strategy, Alibaba needs not only to provide digitalizing tools for retailers, but to deeply engage in the operation of retail enterprises, so as to build a complete user-centered system connecting online and offline fields and reconstructing all links from manufacturing to consumption.

Investors' lack of confidence in the New Retail-related stocks is believed to be the major reason that pushes Alibaba to form a new model for New Retail. 

Some insiders analyzed that the e-commerce giant would, on one hand, directly leverage the experience accumulated in the development of Hema Fresh Supermarket, and on the other hand, bring in more technologies and business formats via the cooperation with Sun Art Retail.  

Another internet giant Tencent has also made a big push into the offline business by investing in Yonghui Superstores, Carrefour, Wanda and other companies. Yonghui Superstores is reported to be Tencent's vanguard for New Retail. 

The ways the two titans adopt are completely different. Xu Rongcong, chief analyst of trade and new retail of China Merchants Securities, said to NBD that Alibaba is transforming retail enterprises by its own method, in purpose of establishing an Alibaba-centered system to make better use of its resources, and Tencent, in contrast, is empowering those retail companies with its current technology, traffic and other resources, a way that gives partners a bigger say. 

Email: zhanglingxiao@nbd.com.cn