Yanks for the retail memories, but China is the future, Alibaba

Alibaba has taken a sideswipe at the US retail sector, labelling it lumpy and trailing behind a buoyant, disruptive China.

In an online post, the e-commerce giant says: “Consider that over 9,000 US stores closed last year, and another 12,000 are on the chopping block this year, according to commercial property firm Cushman & Wakefield. Despite a 4.2% rise in 2017 over the previous year, US retail growth is lumpy and clearly not firing on all cylinders. Every week brings gloomy news of bankruptcies or downsizings. Online sales, meanwhile, have been climbing, underpinning the sector’s overall growth."

It adds: "US retail is at a crossroads, with brands and retailers still trying to decide whether e-commerce is friend or foe. On the one hand, e-commerce is killing traditional bricks and mortar business, but on the other, you’ll have a hard time finding a company whose future growth strategy doesn’t rest on developing its online channels.”

In China, however, the ‘either-or’ equation is being pushed aside in favour of the New Retail model, melding the best of both in-store and online experiences. The country's retailers are not torn between propping up legacy business and trying something new, Alibaba argues. “China is moving much faster than the west in this evolution because the western retail model is built on legacy systems. China’s model is disruptive,” says Frank Lavin, CEO at ExportNow, which helps western brands sell into the country. “China does not have the legacy of malls and big box stores like the west. It has no traditional retail model to defend.”