Alibaba’s New Chairman Says He Has to Reinvent Retail Before Someone Else Does

For months, Daniel Zhang huddled with a small team in an underground garage in Shanghai. The chief executive of Alibaba Group Holding Ltd. was working on a secret plan that would sound crazy even to many of his own colleagues 100 miles away in Hangzhou. Zhang wanted to launch a startup inside the e-commerce giant that would combine a grocery store, a restaurant, and a delivery app, using robotics and facial recognition to speed up logistics and payment.

That project, Freshippo, has since become a major part of Zhang’s blueprint for Alibaba’s future, with 150 stores (and counting) across 17 Chinese cities. On a recent weekday afternoon at a store in Hangzhou, plastic bins shuttle automatically along tracks in the ceiling, collecting goods from around the store for online orders. Deliverymen stand by to transport the goods anywhere within a 1.9-mile radius in as little as 30 minutes.