Internet giant opens first physical store of its cross-border shopping platform

Internet giant Alibaba Group Holding Ltd opened its first physical store for cross-border e-commerce platform Tmall Global in its headquarters in Hangzhou, Zhejiang province, on Friday, taking advantage of the city's preferential policies on trans-border retail.

The outlet, located in a downtown Intime Department Store that was acquired by Alibaba last year, features the use of big data and algorithms to pinpoint and forecast customer needs, the company said in a news release.

The move serves to boost imports in light of the government's pledge to further cut import tariffs, said Liu Peng, general manager of Tmall Global.

Occupying 300 square meters, the store sells sought-after products such as beauty and personal care items, healthcare products and high-end wine as well as bags and accessories.

The choice of goods is based on a careful study of consumer preferences in a radius of 3 kilometers of the store, according to the company, leveraging the rich data generated through Alibaba's various online shopping sites that boast more than 500 million active users.

Alibaba described prospective customers of the first store as "middle-income earners who drive imported cars such as Volkswagen, BMW, Mercedes-Benz and Ford". Meanwhile, purchase history indicates that over 35 percent of them are aged between 26 and 35, favor wines and lipsticks, and have a better chance to work in office premises.

After examining the products, shoppers can make purchases by scanning QR codes attached to the items and complete their payments via mobile phones. All prices are inclusive of duty and tax, circumventing the need for declaration, a company spokesperson told China Daily.

Customers can then choose to pick up goods in-store or have them delivered. Alibaba promises to achieve same-day delivery within three kilometers for orders placed before 2 pm, with the rest reaching their destinations the next day.

"Lack of experience and timeliness is a major pain point for cross-border retail," said Chen Yijun, vice-head of the Zhejiang Provincial E-commerce Promotion Association. "The debut of Tmall Global's brick-and-mortar shop is a demonstration of how New Retail thinking is being incorporated into cross-border e-commerce."

Alibaba said it will quicken the pace to roll out similar stores in cities like Shanghai, Ningbo in Zhejiang and Shenzhen in Guangdong province, all of which house e-commerce pilot zones that adopt faster and more efficient information, financial services and logistics systems to boost cross-border trade.

Last month, Alibaba announced it has set a target of 1 trillion yuan ($158 billion) for its transaction volume on imported goods over the next three years, as China gears up to host its first import expo in November.