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Alibaba’s latest move in new retail: Investing in milk delivery startup Tianxianpei

Alibaba now controls a 50% stake of the company.

Photo: Tuchong

Alibaba is now a shareholder of Shanghai-based milk delivery startup Tianxianpei, according to changes in corporation registration information.

Fresh off of a record-breaking November 11 bonanza, the tech conglomerate now holds a 50% stake of the digital milkman, while Chinese milk producer Mengniu Dairy owns the other half of the company, according to corporate intelligence information provider TianYanCha.

Tianxianpei, which was set up in July 2018 under Mengniu’s new retail department, allows residents to order fresh milk and yogurt products on Tmall and pick them up in refrigerators near their residences. The platform exclusively offers Mengniu’s dairy products, and claims that it has entered nearly 600 neighborhoods in more than 20 major cities in China, but it has yet to cultivate broad service coverage, and is far from being a household name.

Tianxianpei’s online-to-offline model differs from that of conventional milk delivery services. Specifically, the company’s refrigerators eliminate the possibility of milk spoiling after being left in ambient temperature for too long. And for maximum convenience, its app allows users to designate a pick-up time.

Alibaba’s investment may mark yet another attempt to incorporate new services into its new retail strategy, which is an idea shaped by Jack Ma that describes the convergence of online and offline commerce. In March 2015, Alibaba created Freshippo, also known as Hema, to put new retail into practice.

Freshippo resembles most other supermarkets as it sells all manner of groceries — fresh fruits and vegetables, as well as live seafood. But at Hema’s headquarters, roughly half of the staff are software engineers. While conventional supermarkets gather payment information at the checkout counter, Hema knows about its customers even before they walk in, including phone numbers, recent Alipay transfers, and items that they may have browsed on the Hema app. Other tools are adopted too, like heat maps that indicate where customers spend the most time in stores.

Following this investment, Alibaba shares are expected to begin trading on November 26 in Hong Kong. It is set to price its shares at HKD 176 (USD 22.48) apiece.