Report: Alibaba, Kroger Consider Merger

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SAN FRANCISCO – Soon after Amazon opened its first Amazon Go checkout-free grocery store, reports surfaced that grocery giant Kroger Co. and China’s online commerce mammoth Alibaba have been discussing a merger since early December, according to The New York Post.

The Ministry of Commerce in China seemed to hint a deal is practically done and said in a statement last week that “Alibaba has teamed up with Kroger … to speed up the integration of online and offline sales.”

If they do merge, insiders say it would combat Amazon’s expansion into the food business. For instance, Alibaba could get its Alipay app into Kroger shoppers’ hands and let them skip checkout like Amazon Go. And Kroger could sell goods in China. 

Specifically, the grocer could tap Alibaba’s Hema supermarket chain, which pairs digital and traditional retail to let customers use mobile phones to order, pay, and get information about items. Kroger would also be able to direct customers to the Alibaba site, where they could buy general merchandise.

Amazon’s push into groceries – including last year’s Whole Foods acquisition – put pressure on Kroger to improve technology. Kroger is rolling out curbside pickup as one way to fend off Amazon. 

ChainStoreAge.com reports that Alibaba has been making an aggressive push to work with U.S. and Canadian companies that could be interested in selling in China, as well as rolling out its cloud services and payment products.