Dive Brief:

• Chinese e-commerce giant Alibaba and Bailian Group, one of China's largest offline retail conglomerates, have agreed to partner on joint technology development initiatives throughout one another's ecosystems.
• The companies will leverage big data capabilities to boost integration between offline stores, merchandise, logistics and payment tools in the interests of improving efficiency and enhancing the overall consumer experience.
• Headquartered in Shanghai, Bailian is one of China’s largest and most established retail conglomerates, with more than 4,700 outlets across 25 provinces, 200 cities and autonomous regions.

Dive Insight:

Alibaba and Baillan will cooperate on the following: New retail outlet designs that leverage cross-channel store operations and ordering systems to enable real-time service solutions for customers at physical stores; joint R&D in areas such as artificial intelligence, Internet of Things, geolocation and facial recognition; combining resources in customer insight and supplier channels to help improve merchandise selection and reduce cost; and activating Alipay at all Bailian stores, while Bailian’s payment tools Safepass and Bailian OK Card will be integrated with Alipay to provide a unified third-party payment solution for consumers.

This is an impressively far-reaching partnership for which there may be no direct comparison anywhere else in the world. Imagine Amazon and Wal-Mart teaming up to work on technology projects together (or if not Wal-Mart, maybe Kohl's, Target or Macy's.) Is it a partnership of equals? Any partnership between a successful e-commerce player and a brick-and-mortar retail giant these days would seem just by appearances to be more beneficial to the operator of physical stores.

Still, it is worth wondering if this pairing is the initial step in a relationship that could result in Alibaba's massively popular Singles Day sale event coming to the brick-and-mortar realm (to be clear, no one is saying that just yet.) The partnership also appears to give Alibaba's Alipay some strong exposure as a payment option for use inside physical store, and maybe that's exactly what Alibaba is looking for.

Alibaba CEO Daniel Zhang suggests in the press release announcing that partnership that "the distinction between physical and virtual commerce is becoming obsolete.” It's true that in retail overall the creation of a seamless omnichannel experience that allows customers to move back and forth between modalities is becoming much more important, though we're not so sure how far along blurring of lines really is.

Yet, between this partnership and Amazon's efforts to get into brick-and-mortar store operation, we are at least getting a sense that physical retail is still important, and that much more still can be done technology-wise to maximize the potential of physical stores. Even e-commerce giants think so.