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Alibaba is preparing a bet on "Fresh retail" in order to remain cheerful against the background of China's containment

Alibaba is preparing a bet on "Fresh retail" in order to remain cheerful against the background of China's containment

Hong Kong-China's electric Commerce favorite Alibaba group Holding is paying more interest in linking offline retailers to online shoppers because it is eager to maintain a personal upturn amid financial regress in the country.

Because Alibaba is preparing to release benefits in October-December on Wednesday, traders and experts are looking for symptoms such as whether the group is able to withstand China's financial adjustment, in which the annual rise fell to 6.6% last year - the slowest pace since 1990.

Alibaba founder Jack MA Yoon used the term "Fresh retail" - used to describe the integration of the Internet and offline retail-back in 2017, and the heads said about the situation more often, because they are faced with doubts about the relative possibilities of the company's benefits.

"In the next 5 years, you will see that the whole retail section will be much more digital," said Joseph Cai, co-founder and Executive Vice Chairman of Alibaba, at the Reuters event last week.

Alibaba started offering technology this month in order to convert brick and mortar stores. CEO Daniel Zhang Yun said during the launch event that "all firms will need a completely new way of working" in the era of the digital economy.

Firma saregama Merkle profit in July-September, missing expectations as salvation, for example, and nezametnoe benefits. In November, Alibaba cut personal spotless 2018 monitoring by 4% to 6%, predicting 375 billion to 383 billion yuan ($55.6 billion). up to $ 56.8 billion).

Brand new electric Commerce, covering Pinduoduo, which is the data social media for motivated buyers, snatching market share from favorite. New York-based research firm eMarketer predicts that the mere fraction of Alibaba in the Internet market will fall by almost 5 percentage points to 53.3% in 2019.

But Cai rejected the idea that the slowdown in China's financial recovery is actually affecting the firm's recovery line, saying that people are very excited about the " rise of Alibaba in the context of China."

Alibaba's annual singles day online shopping event is November. 11 in another set a sales record, reaching 213.5 billion. yuan, but the rise was slower compared to the previous year.

The fresh retail alignment has the ability to guarantee momentum in a long-term opportunity, ignoring the large initial costs, said Cai, citing Alibaba Hema Xiansheng's online off-line supermarket. Premium grocery retailer contains a better rate of return than the online market Alibaba, he said.

The usual Hema store will need within a year in order to expire at breakeven, and online orders are issued within 60% of the total, demonstrate the study of the brokerage firm Jefferies. A greater contribution to the implementation is made by ladies aged 25-45 years, with a fraction of repeat purchases above 80%.

Hema has opened more than 100 body shops throughout China, and Cai has stated that the expansion of the state network still "contains an endless road."

The use of data analysis technologies allows retailers to identify their own buyers, in that number of purchase situations, at that point when they enter the shop, said Cai.

Experts are afraid, in fact, that large investments in a fresh retail model have all chances to influence the profitability of Alibaba.

The model" asks for investments in marketing, [capital expenditures] and purchases in order to consolidate its own market positions in the next few years, " Fitch Ratings experts report in a recent report. But they are thinking, actually which Alibaba contains sufficient monetary means, bought from a private the main business of electric Commerce for funding this fresh ambitions.

The youngest competitor Alibaba JD.com had physiological stores, which integrate online and offline skill. The firm launched a similar network of hypermarkets brisk products under the title 7Fresh last year and was intended to detect 1,000 stores in the nearest 3 - 5 years, said in September, van Season, General Director of the network.

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