retail news in context, analysis with attitude

The Wall Street Journal reports that Alibaba Group Holding Ltd., described as "the Chinese e-commerce giant," is investing $206 million in ShopRunner Inc., which offers unlimited two-day shipping from a number of retailers - including Toys R Us, RadioShack, Brooks Brothers, GNC, American Eagle Outfitters, and Drugstore.com - for a $79 annual fee.

ShopRunner, according to the Journal, is being positioned as a way to help retailers compete more effectively with Amazon.com: "ShopRunner, founded in 2010 and based in San Mateo, Calif., is small compared with Amazon, though it has more than doubled its membership rolls in the past year, to about one million. Amazon doesn't disclose membership of its Prime two-day shipping service, but Morningstar estimates it has about 10 million members, which could grow to 25 million by 2017."

"The new investment comes as Alibaba mulls an IPO in coming months that could net it $10 billion," the Journal writes. The company "has had designs on the U.S. for years. It operates two U.S.-facing websites, traditional online marketplace Aliexpress.com and Alibaba.com, a business-to-business sales site. In 2010, it struck a deal to sell goods through eBay's marketplace."
KC's View:
It is going to take a lot of time and money to catch up with Amazon, but I do think that Alibaba has the kind of resources to provide retailers with a way to engage in an effective battle with the e-commerce giant. And I wonder if at some point, Alibaba might start try to find a way to help retailers compete with Amazon Fresh, especially if that service starts to roll out nationally.