Alibaba spent HK$22.4 billion to invest in RT-Mart's parent company's stock price fell instead of rising

　　As one of the traditional retail giants, Gao Xin Retail's sales performance has not been ideal in recent years. Gao Xin Retail's performance growth in recent years mainly comes from newly opened stores, while the performance of already opened stores is negative.

　　Financial report data shows that Gao Xin Retail's same-store sales have been in a downward state in the past two years. In 2015, same-store sales fell by 3.6%, and improved in 2016, but still fell by 0.34% year-on-year.

　　Industry insiders pointed out that Alibaba's investment in Gaoxin Retail this time means that well-known supermarkets represented by RT-Mart and Auchan fully embrace new retail.

　　It is understood that in the context of the recession of traditional retail, Gao Xin Retail is also constantly developing new business layouts: in addition to Feiniu.com O2O and B2B businesses, it launched "Qiusuda" to focus on door-to-door delivery of fresh products, layout of high-end boutique supermarkets in first-tier cities, and testing unmanned convenience stores.

　　Yu Simin, an analyst at the online retail department of China E-Commerce Research Center, said that joining Alibaba's new retail means that RT-Mart can use Alibaba's mature online resources to develop its own online business, promote the digitalization of RT-Mart stores, and apply new retail solutions to RT-Mart stores.

　　Although they have just joined hands, Gao Xin Retail and Alibaba have long been "cooperated" in their actions. While Gao Xin Retail is constantly developing new business formats, Alibaba is also reaching strategic cooperation with many offline supermarkets, such as Bailian Group, Sanjiang Shopping, Xinhuadu, etc.

　　However, industry insiders pointed out that most of the companies that Alibaba's strategic investment in the past have regional limitations, while the two major brands of RT-Mart and Auchan owned by Gao Xin Retail, which have been invested this time, operate 446 hypermarkets in 29 provinces and cities across the country. In other words, Gao Xin Retail is still of great significance to improving Alibaba's offline system.

　　Alibaba's offline system is still not perfect yet, while Gao Xin Retail has a large number of stores and a complete offline system. Through its investment, Alibaba can quickly realize the deployment of the offline part of its new retail strategy.

　　It is worth noting that the outside world generally believes that one of the most important cooperation projects between Alibaba and RT-Mart will be Hema Fresh.

　　Regarding the impact of this investment in Gaoxin Retail, Hema Fresh said to reporters that it is inconvenient to comment." However, industry insiders believe that this is a "stable profit but no loss" business for Hema Fresh.

　　As a very ambitious sector in Alibaba's new retail strategy, if Hema Fresh wants to further expand its layout nationwide, it still lacks two key factors - real estate property resources and supply chain resources.

　　Since its inception, Hema Fresh has stated that residents with a radiation range of less than 3 kilometers aim to achieve free delivery within 3 kilometers and deliver 30 minutes. In terms of location selection, Hema Fresh said that it is mainly determined by the active users of surrounding Alipay and the purchasing power of users. However, the reality is that scientific site selection has put Hema Fresh in an embarrassing situation. Many of the store sites that big data is "optimistic" are actually already in the market.

　　Gao Xin Retail’s rich real estate resources are a considerable asset for Hema Fresh. In Yu Simin's view, Gao Xin Retail has relatively strong property reserves, which can help Hema Fresh's market expansion plan.

　　Data shows that as of September 30, 2017, Gaoxin Retail currently operates 446 hypermarkets in 29 provinces and cities across the country, with a total operating area of ​​more than 12 million square meters. At the same time, according to the 2017 interim report, about 8% of Gao Xin Retail’s stores are located in first-tier cities, 17% are located in second-tier cities, 45% are located in third-tier cities, and 22% are located in fourth-tier cities. 8% are located in fifth-tier cities. In other words, Gao Xin Retail’s stores are mostly concentrated in third- and fourth-tier cities, which is also in line with Hema Fresh’s strategic intention to expand into third- and fourth-tier cities.

　　At the same time, Yu Simin pointed out that in addition to real estate resources, Gao Xin Retail can also solve two major problems for Hema Fresh and the entire Alibaba offline system: one is to reduce the investment required to transform stores, and the other is to ensure strong offline supply chain channels and logistics and warehousing facilities. (Source: Sina News)

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