Is a Kroger-Alibaba Partnership in the Works?

Grocery giant Kroger Co. is in talks with Alibaba Group Holding Ltd. for a potential partnership. Speculation follows that Kroger is looking to buy Overstock.com and Boxed, the former a seasoned e-commerce business and the latter a growing e-commerce startup. According to a Chinese government press release, the companies are looking to join forces in order to “speed up the integration of online and offline sales.” Kroger and Alibaba are both leading retailers in their respective industries, so a partnership could help them go head to head with newly-announced Amazon Go, the online retailer’s register-free grocery store.

Vivaldi CEO and Founder Erich Joachimsthaler offered his perspective on the news to Progressive Grocer. According to him, due to its massive well of resources, Alibaba can merchandise to Kroger, which would allow the company to enter new merchandise categories. “This will help Kroger to leapfrog both Amazon and Walmart. This partnership blunts the Amazon efforts into groceries.” Despite Amazon’s impressive array of new business fronts—including its acquisition of Whole Foods, its new bookstores, and now Amazon Go—Alibaba has penetrated the Chinese market much more than Amazon has penetrated the US one. A partnership between Alibaba and Kroger could therefore pose a serious threat.