Rumor has it that Alibaba Group, the Goliath of China’s e-commerce world, will hold a joint press conference with department store chain Intime Retail (Group) Co. Ltd. (01833.HK) on Thursday to announce a tie-up for Alibaba’s annual online shopping carnival on November 11. This combination of strengths from online to offline (O2O) is really worth the wait.
No one can deny that Alibaba’s promotion on Double 11, also known as Bachelor’s Day, is one of the most important dates on the country’s retailing calendar. Last year, the company’s e-platforms, Tmall and Taobao, together sold more than 19.1 billion yuan (US$3.12 billion) in products in a single day. The turnover for the virtual shopping festival is expected to easily surpass 20 billion yuan this year.
But Alibaba has had a headache working out how to process the tsunami of orders that come in on the day. With the help of Intime, Alibaba can cut its reliance on express couriers and minimize delivery costs for customers. Online shoppers can pick up the goods at the retailer’s brick-and-mortar stores within 15 days of placing an order through Alibaba, the Shanghai Securities News reported, citing sources familiar with the deal.
The O2O model will not benefit just one side. The possible tie-up with Alibaba can bring new customer traffic through Intime’s doors and rejuvenate its sales. The department store firm certainly needs some way of driving new sales. The company’s revenue growth in the third quarter slowed markedly to 3.9 percent compared with 14.2 percent in the first half. Intime will be able to operate with a low inventory and fast turnover once buyers get used to the O2O model.
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