Dive Brief:

• Building on its reputation for technological innovation, Alibaba Group has brought "New Retail" digital technology to Chinese hypermarket chain RT-Mart and has so far completed transforming about 100 of its 400 brick-and-mortar stores, according to Alzila, a news site operated by Alibaba. Last year, Alibaba took a 36% stake in RT-Mart’s parent Sun Art Retail Group, which also operates stores under the Auchan banner.
• The transformation, which took "months," uses Alibaba’s Hema supermarket chain as a model and includes one-hour delivery for orders within a 3-kilometer (1.86-mile) distance of a store; a delivery option for in-store shoppers; a Smart Mommy-and-Me area for infants and new mothers; and a Daily Fresh program for higher-quality meat, vegetable and dairy products, Alzila reported.
• RT-Mart is also getting access to Alibaba’s customer insights, supply-chain management, retail technologies and electronic payment system Alipay, which is owned by Ant Financial, a company Alibaba has a 33% stake in.

Dive Insight:

Much retail technological leadership is happening in Asia, and the biggest of those companies — Alibaba, JD.com and Rakuten — are showcasing their technologies for eventual export to the U.S. Alibaba, which delivers more packages than Amazon, is moving very aggressively to implement what gets termed "New Retail" technologies in physical stores in addition to its online dominance in China.

Although primarily an online platform, Alibaba continues to move forward with brick-and-mortar in other areas. It spent more than $1.3 billion recently to invest in Beijing EasyHome Furnishings and Shiji Retail Information Technology. Alibaba plans to add 30 locations in Beijing to its Hema chain this year. The company opened its "More Mall" shopping center in April at its Hangzhou headquarters, confirmed Forbes. Early this year, there were reports that Alibaba met with Kroger "to speed up the integration of online and off-line sales."

Meanwhile, Tencent, a large Chinese technology company, has announced a "strategic cooperation" with Walmart China to help Walmart with its plans for digital expansion in China, and to develop Tencent’s mobile payment and mini program services, TechNode reported.

As a result of the changes at the revamped RT-Mart stores, online order volumes have increased, Alzila said. One Shanghai store has seen online orders rise to 5,000 a day at their peak from almost nothing prior to the transformation.

RT-Mart and Alibaba are considering bringing other New Retail technologies to the hypermarkets. Alibaba expects a complete transformation of RT-Mart’s China stores by the end of the year, Alizila reported.

"New Retail has introduced a new way of thinking. By digitizing the store’s operation, the online and offline business merge into one," Peter Huang, CEO of RT-Mart told Alzila. "This will boost retailers' online transaction volume."

For the one-hour delivery of orders placed through RT-Mart’s mobile app, in-store inventory is picked, then put on conveyor belts that carry grocery bags above the shopping floor to where they are packed and readied for delivery, similar to how it's done at Hema stores, according to the report. Additionally, in-store shoppers can use the Mobile Taobao app to scan bar codes and place products in a virtual shopping cart. The transaction is completed with Alipay and delivered to a residence in as quickly as 60 minutes.