Kroger teams with Amazon rival Alibaba to sell groceries in China

Alexander Coolidge | Cincinnati Enquirer

Show Caption Hide Caption Kroger's $23 billion house brand business Kroger's store-branded items are big business and help it compete against Walmart, Amazon and others. The grocer makes almost half of them.

In a bold move against Amazon, Kroger is teaming with internet giant Alibaba to sell groceries in China.

The move will be the Cincinnati-based supermarket chain's first-ever international venture and focus on selling dietary supplements and private label goods, including natural and organic foods.

"E-commerce enables Kroger to quickly scale to reach new customers and markets where we don't operate physical stores, starting with China," said Yael Cosset, Kroger's chief digital officer.

The pact comes almost seven months after industry chatter about a potential Kroger-Alibaba alliance – or even merger – pushed up Kroger's stock.

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The latest move is possibly one of the most aggressive countermeasures aimed at Amazon, which threw the U.S. supermarket industry into a panic when it took over Whole Foods last year.

Under pressure to beef up its digital efforts, Kroger has launched a series of initiatives in 2018 to grow its business and curb the Amazon threat:

• Earlier this month, Kroger announced its direct-to-shoppers Ship service in Cincinnati, Louisville, Nashville and Houston.

• In June, Kroger announced a pilot project to test driverless grocery delivery that will rollout in Phoenix.

• In May, Kroger announced an alliance with British digital retailer Ocado to build a network of U.S. warehouses to provide digital grocery deliveries.

• In February, Kroger announced it had expanded home delivery service to 45 metro areas after inking a 25-city deal with Instacart.

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