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Alibaba Sees ‘Tremendous’ Challenge for Pure E-Commerce Business

  • E-commerce giant eyes upgrading China’s brick and mortars
  • Alibaba sees middle-class consumption upgrade as growth driver

Alibaba Group Holding Ltd. expects pure e-commerce operators to face ‘tremendous challenges’ as the web giant seeks to tap more growth from transforming China’s $4.5 trillion traditional retail industry.

China’s largest e-commerce company plans to upgrade retail businesses and improve efficiency across product manufacturing, distribution and service, Chief Executive Officer Daniel Zhang said in an e-mailed letter to shareholders on Thursday. The company is working with partly-owned Suning Commerce Group Co. and Intime Retail Group Co. to integrate the online experience with brick-and-mortar shopping.