Credit: Shutterstock photoAlibaba Group Holding LimitedBABA is reportedly prepping for its first gas station.
Per a Caixin Global report, it will be an unstaffed gas station with a robotic arm to fill fuel tanks. It is expected to open in Alibaba's home city, Hangzhou at the end of this month.
The station will also have the company's Hema supermarket like convenience store that allows customers to enter by scanning a QR code, select items and pay automatically through Alipay at the checkout.
The concept is similar to Amazon's AMZN Go stores where shoppers can enter by downloading the Amazon Go app and getting their smartphones scanned. They can pick up items and simply leave. After a while, money is charged online from their Amazon account.
An updated version of the gas station is reportedly slated for launch next year. It will automatically identify the driver, car model and fuel type through artificial intelligence.
Alibaba is also building a five-story shopping mall called More Mall in Hangzhou. The stock has gained 108.5% year to date, substantially outperforming the 53.2% rally of the industry it belongs to.
A Renewed Bet on Petroleum?
If the reports are true, the move will mark Alibaba's renewed push into the petroleum space. In 2015, the company collaborated with China's largest refiner China Petroleum & Chemical Corp., also known as Sinopec to launch an online industrial supply system. Alipay is in use at many gas stations across the country.
Alibaba Group Holding Limited Revenue (TTM)
Alibaba Group Holding Limited Revenue (TTM) | Alibaba Group Holding Limited Quote
Extending "Smarts" Beyond Core Retail
Increased competition from the likes of eBay EBAY , Amazon and JD.com JD , and market saturation have forced Alibaba to move beyond hawking goods online. The company is trying to build its business as an ecosystem of retail, cloud and artificial intelligence.
With its newest venture, it appears that Alibaba is banking on artificial intelligence and machine learning for much of its future growth.
Raising Barriers to Entry
From its grocery push and blending online and offline features in retail to movies, cloud and artificial intelligence, Alibaba has been doing exactly what Amazon does in the United States. Other Chinese technology giants are also imitating the ways of U.S. technology leaders.
This is a clever way of utilizing the Chinese regulatory environment and further strengthening entry barriers for U.S. competitors. By having a business similar to those of their U.S. rivals, Chinese companies will enjoy the home advantage even if regulations ease in the future.
At present, Alibaba carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
