U.S. grocery store chain Kroger Co. and Chinese e-commerce and tech giant Alibaba Group Holdings have held early stage talks about working together, that included meetings where U.S. executives visited China, said a source that is familiar with this matter.
The talks over possible business development are only in the initial stage, but it is unclear if they will eventually lead to any form of cooperation, the individual familiar with the talks said.
The talks between the two companies come as Amazon.com the U.S. based e-commerce giant has aggressively expanded into groceries after acquiring Whole Foods Market last year.
The discussions between Kroger and Alibaba were first reported earlier in the New York Post. A spokesperson for Kroger based in the U.S. did not respond to a request for comment and the same for a spokesperson in China with Alibaba.
Earlier in the week, Amazon opened its checkout-free supermarket Amazon Go to the public. The store relies on sensors and camera to track what a shopper removes from store shelves
The renewed push by Amazon last year into groceries with is acquisition of Whole Foods Market has put additional pressure on Kroger, the leading supermarket chain in the U.S. to improve its technology that includes mobile ordering as well as delivery. Kroger rolled out pickup service curbside as one method of fending off Amazon.
Alibaba has made aggressive pushes into working with both U.S. as well as Canadian businesses that might be interested in having sales in China, and rolling out cloud services and its payment products.
The Kroger and Alibaba talks were not at the CEO level, said the individual in the know, describing the supermarket chain as one of several companies in the U.S. holding initials talks with China-based Alibaba.
In China, the supermarket chain Hema, owned by Alibaba, has become a bed for testing by the e-commerce company’s move into brick and mortar retail, where mobile phones order and pay for products and receive information about different items.
Kroger, which has a desire to sell more types of “general merchandise” in its stores like Walmart and Amazon, could direct its customers to Alibaba’s platforms where they could purchase general merchandise, reported the New York Post citing an unidentified source.
With the growth of Amazon in the marketplace grocery chains are all trying to find new ways to maintain and attract new shoppers.