Alibaba Group Holding Limited (BABA - Free Report) recently unveiled A100 business partnership program, in a bid to boost digital transformation in a large number of companies. Per the partnership, the company will provide an array of enterprise services to its members on a single unified platform.
The program will run on Alibaba’s operating system. The company will provide its members an access to its operating system through the program, which will aid them in expanding and efficiently regulating their business operations. The program will initially be extended to Alibaba’s existing partners and gradually be available to companies of all sizes that are searching for digitized solutions.
The operating system is expected to benefit Alibaba in shifting from a platform facilitating e-commerce to a cohesive global technology company. Notably, it is trying to build its business as an ecosystem of retail, cloud and artificial intelligence. Moreover, Alibaba has been processing massive data that is instrumental in improving customer experience and feeding its AI initiatives.
Coming to price performance, Alibaba’s shares have lost 19.6% over a year compared with the industry’s decline of 5.5%.
New Retail Strategy
Alibaba announced that the interested companies can get access to its operating system through New Retail strategy.
The company continues to ramp up its efforts to develop “New Retail” strategy, in order to bridge the gap between online and offline shopping using its big data capacity. Alibaba expects that the system will give brick-and-mortar retailers new opportunities to evolve across marketing, inventory, as well as distribution networks.
Notably, in second-quarter fiscal 2019, the company witnessed 37% year-over-year growth in the retail business in China, driven by driven by robust improvement in its New Retail strategy. Per reports, Alibaba’s New Retail strategy has gained significant traction with 200,000 offline stores transforming into “smart stores” and more than 1200 brands getting digitalized.
The broader goal is to tap China’s massive retail space, which is expected to reach $5.63 trillion in 2019, that offers a combination of both online and offline options. Notably, retail e-commerce sales are expected to grow 30.3% to reach $1.989 trillion by 2019.
We believe that Alibaba’s new retail strategy will help it to gain a competitive edge over peers like eBay (EBAY - Free Report) , Amazon (AMZN - Free Report) and JD.com (JD - Free Report) in China.
Alibaba Group Holding Limited Price and Consensus