Alibaba’s (BABA Quick QuoteBABA - Free Report) online second-hand goods trading platform, Xianyu, is set to open its first offline "all-category" bricks-and-mortar store in the Gongshu district of Hangzhou.

Notably, the Xianyu Recycle Shop, the platform’s first "all-category second-hand store," will use a consignment model, allowing customers to sell or buy used items.

The store will offer a variety of goods, including shoes, apparel, accessories, and luxury items, but will prohibit trading gold, jewelry, food, pets and plants.

The physical store is expected to offer a convenient and hassle-free experience for customers, eliminating the need to constantly check and respond to buyer inquiries via the app.

Alibaba is expected to gain solid traction across resellers in China on the back of its latest move.

Strengthening Taobao and Tmall Group Segment

The latest move is in sync with Alibaba’s increasing efforts to strengthen its Taobao and Tmall Group segment’s offerings.

Notably, Taotian Group introduced new experiences during the Tmall Double 11 Global Carnival Season, including its AI smart assistant "Taobao Ask" Q," offering ten tools for free to improve merchant productivity and reduce content production costs.

Further, Taobao PLUS, a new border services brand, recently offered enhanced services in Hong Kong, Macao, Taiwan, Singapore and Malaysia, including reduced free shipping thresholds, local refund options and exclusive customer service.

Taobao and Tmall’s "Hangzhou Asian Games Official Flagship Store" expanded its product categories with nearly 400 Hangzhou Asian Games licensed products, including plush toys, mascot keychains and commemorative badges of Hangzhou Asian Games mascots. It also includes 3D experience halls, commemorative tops and backpacks.

To Conclude

All the above-mentioned endeavors to strengthen the Taobao and Tmall Group segments will likely strengthen the company’s overall financial performance in the near term.

The Zacks Consensus Estimate for BABA’s fiscal 2024 revenues is pegged at $132.68 billion, indicating year-over-year growth of 5.3%.

The consensus mark for earnings is pegged at $8.86 per share, indicating year-over-year growth of 11.6%.

However, weakening market conditions in China, softness in its China Commerce business, and sluggishness in online physical goods’ gross merchandise volume at Taobao and Tmall marketplaces continue to remain major concerns for Alibaba. Its shares have lost 38% over the past year, underperforming the Zacks Retail-Wholesale sector’s return of 18.4%.

Zacks Rank & Stocks to Consider

Currently, Alibaba carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the same sector are The Gap , Darden Restaurants (DRI Quick QuoteDRI - Free Report) and Fastenal (FAST Quick QuoteFAST - Free Report) . While The Gap currently sports a Zacks Rank #1 (Strong Buy), Darden Restaurants and Fastenal carry a Zacks Rank #2 (Buy) each, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Gap has gained 86.7% over the past year. GPS' long-term earnings growth rate is 12%.

Darden Restaurants’ shares have risen 75.9% over the past year. DRI's long-term earnings growth rate is 7.96%.

Fastenal's shares have rallied 75.9% over the past year. FAST's long-term earnings growth rate is 9%.