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Is China’s Alibaba teaming up with U.S. retailer Kroger?

by | 25 Jan, 2018

Nordstrom Kohl's Target Macys

Is Alibaba CEO Jack Ma planning to disrupt Amazon with new U.S. partnerships?

Watch out Amazon – a key rival is on your tail!

The Chinese e-commerce giant Alibaba has reportedly held discussions with management at U.S. grocer Kroger about working together in the future, including a meeting in which American executives from the firm travelled to China.

One report indicated the 2 businesses have already agreed to a deal spanning online and off-line sales, possibly in a bid to disrupt Amazon’s move into the food sector after it bought Kroger rival Whole Foods in 2017. However the business development talks are at an initial stage and it is not clear if they will lead to any cooperation, another unnamed source said.

The teaming up of the 2 firms could be a way for Alibaba to try and increase its comparatively small presence in the U.S. while it continues to dominate the e-commerce space in its native Asia.

The unnamed source said the talks with the grocer were not CEO-level, describing Kroger as one of many U.S. companies holding initial discussions with the Chinese company.

Spokespeople for both Kroger and Alibaba did not respond to requests for comment.

Kroger operates in 31 states in the U.S. and has been a staple grocer to millions of Americans for decades. Though the firm has been able to consistently increase earnings and dividends for over 10 years, it has failed to make major headway share price wise (see chart).

Meanwhile in contrast, Alibaba’s stock has been on a firm upward trend for the past 5 years – a testament to the ingenuity of its founder, Jack Ma. As of January 2018, Alibaba’s market cap stood at $502 billion, becoming the second Asian company to break this mark after Chinese tech firm Tencent.

Alibaba is the world’s largest and most valuable retailer since April 2016 with operations in more than 200 countries.

Related: Google looks to branch out further into China with new Tencent deal

Nordstrom Kohl's Target Macys

Like many other retailers who are enduring the wrath of Amazon’s expansion into the sector, Kroger stock has failed to make significant headway over a 5-year view

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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