There’s Only One Way To Break Into China’s Crowded Retail Market

China’s two retailing powerhouses, online commerce pioneer Alibaba and social media-gaming pioneer Tencent, have systematically established a duopoly of record proportions in record time. Combined, they have spent more than $20 billion in the past 12 months alone to change the way people in China shop. (The precise value of their investments cannot be determined, given that many of them are undisclosed or private deals. This figure, along with some others in this article, are drawn from a Bain analysis.) It started when online retailer Alibaba made the seemingly counterintuitive expansion into the brick-and-mortar world. To do this, they invested heavily in everything from Lianhua supermarkets to Intime department stores to electronics retailer Suning. Alibaba is now working to connect China’s millions of mom-and-pop stores with their internet-based distribution network, an initiative called Ling Shou Tong. It has opened futuristic Hema Xiansheng supermarkets, where consumers use the Alipay app to order groceries or prepared food for delivery to their homes—in many places, within 30 minutes. Read more at Harvard Business Review.