Retail



May 28, 2019,   10:16 AM

Alibaba Strikes Cooperation Pact With China Home Furnishings Leader Red Star

Russell Flannery

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jack ma 3

Jack Ma, cofounder of Alibaba. Image source: kremlin.ru

Red Star Macalline Group, the big China home improvement and furnishings mall operator led by billionaire Che Jianxing, has formed a “strategic cooperation” with Alibaba that will cover retail, e-commerce, payments, logistics and consumer finance.

Red Star said in a statement on Sunday it had agreed to tap Alibaba’s e-commerce platforms Tmall and Taobao, logistics network Cainiao, and financial services service Alipay. (Click here for the announcement.)

Red Star said it “can introduce advanced operating philosophies and bring in the technical support of Alibaba in the new-retailing areas to the company’s main business operations in home improvement and furnishing shopping malls. This will enhance the company’s operational efficiency and further encourage the integration of online and offline business of the industry.”

Red Star is China’s largest home improvement and furnishings shopping mall operator in terms of the number of malls and the geographic coverage, according to Frost & Sullivan. It operated 308 shopping malls in 199 cities in China that offered more than 24,000 brands as of the end of 2018. Red Star had a 15% market share in the chain home improvement and furnishings mall sector and a 6% market share in the whole home improvement and furnishings mall business in 2018, says Frost & Sullivan.

Red Star had sales of 3.5 billion yuan, or $507 million, in three months to March, compared with 2.9 billion yuan a year earlier, according to unaudited company figures.  Net profit in the first three months of 2019 rose to 1.31 billion yuan from 1.18 billion yuan a year earlier.

The agreement with Red Star is part of a larger push into “new retail” by Alibaba. Among Alibaba’s other retail partnerships, Alibaba and Starbucks said last year they would link up for deliveries and payments, an agreement that covered more than 2,100 Starbucks stores in 35 cities in China as of April 2019.   Alibaba also had 135 self-operated Freshippo grocery stores.



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