Kroger, Alibaba reportedly talking partnership

The Kroger Co. and China-based Alibaba are talking partnership, according to several news reports.

Alibaba is a Chinese multinational e-commerce and retail technology conglomerate. Insiders say that Cincinnati-based Kroger, the largest traditional grocer in the U.S. with 2,700 stores, could benefit from a partnership with Alibaba.

Tushar Patel, chief marketing officer at Kibo Commerce in Petaluma, Calif., which offers solutions for omnichannel e-commerce, said a potential partnership between Alibaba and Kroger is another “brilliant example” of how important physical retail is to the overall shopping experience for consumers.

“If retailers want to successfully compete, gone are days where they can simply rest on their laurels by only having an ultra-intuitive digital store or just an engaging physical presence with all the bells and whistles,” Patel said in a statement. “The combination of both touchpoints gives retailers the competitive edge to allow consumers to choose their own path to purchase, in a way that's most convenient to them.”

Patel says an Alibaba/Kroger partnership could spell trouble for Amazon, as Alibaba would have immediately expanded its store footprint far beyond Amazon.

“But, as witnessed in 2017, Amazon is never down for the count and seems to always have an ace in the hole, so to speak, as they continue to make decisions that keep them at the front of the grocery race,” Patel said.

An Alibaba spokesman told CNNMoney that Alibaba has had conversations with Kroger, but he said those talks were about how Alibaba could boost Kroger's presence in China.

"Alibaba has dialogue with hundreds of businesses around the world everyday about expanding commercial relationships and reaching Chinese consumers, and Kroger is an example of just that," said the spokesman in the story.

According to CNNMoney, Alibaba is growing rapidly and has several data centers for its cloud computing business in the United States. “But it doesn't seem to have any intention of opening stores in America. It has focused its brick-and-mortar efforts on its home market of China, scooping up a 36 percent stake in Sun Art, a big box retailer similar to Walmart, for nearly $3 billion last year. Alibaba also owns the Chinese supermarket chain Hema,” CNNMoney said in its report.