Retailer Bailian launches own e-commerce platform

More than 10 years after China's e-commerce market rose and gained momentum, the country's largest retailer group by revenue, Bailian, launched its own e-commerce platform－BL.com－in an announcement by the Shanghai-headquartered company on Thursday.

But instead of being a follower in the market that has already been dominated by the likes of Alibaba and JD.com, the State-owned conglomerate is aiming to "lead the industry with its unique advantages", according to Ye Yongming, chairman of Bailian Group.

"We are taking full advantage of what we have in the offline world－4,800 brick and mortar stores, 10,000 retailing staff and an annual visitorship of more than one billion (to its brick and mortar stores)－and transform them into transactions online," said Ye.

Among the 78 online applications introduced on the platform, for example, Bailian Daojia (a home delivery service) will allow residents in downtown Shanghai to shop for groceries and fresh food from the company's online platform and have the goods delivered from the nearest outlet, with no more than three kilos, within three hours.

Last year, Walmart introduced a similar service in Guangdong province by setting the time span within four hours.

The home delivery service will be expanded to major cities in the Yangtze River region next year and later cities including Beijing and Dalian, where the group also has its outlets.

But Sun Fangting, team lead er of consulting group Euromonitor's retailing group, thinks logistics or delivery speeds are still the secondary factors online shoppers consider now, while price and convenience remain the priorities.

"From what we have observed, the market shares of dominant players like Tmall or Yihaodian.com continue to grow, which means it will be increasingly difficult for newcomers to penetrate, even if it's a retailer giant in the physical world," said Sun.

However, she added that the prepaid cards sold by Bailian, commonly known as OK cards, will be a cutting edge for the company to tap into the online market, since the card, acceptable by not only outlets run by Bailian but also restaurants and many other businesses, enjoys an unrivaled popularity throughout China.

Ye expected that sales from the e-commerce platform should contribute to 10 percent of the total group revenue during the first "trial period".

According to a report released by China Chain Store and Franchise Association early in May, Bailian Group consolidated 59.4 billion yuan ($9.08 billion) of sales in 2015. Although it rose from the 7th in 2014 to the top among all Chinese retailers, its growth rate experienced a negative 0.7 percent. New store openings stagnated at zero for the whole 2015.