As Amazon plots its next steps with Whole Foods in the United States, China’s top e-tailers JD.com and Alibaba are already ahead of the curve in online-to-offline grocery retail.

Last week, Chinese e-commerce giant JD.com officially launched its first offline grocery store. Called 7Fresh and opened in Beijing, it’s the first of 1,000 locations planned across China within the next three to five years. On the same day as its debut, its main competitor and China’s largest e-commerce company Alibaba announced that it would be expanding its roster of 20 existing Hema grocery store properties by adding another 30 Beijing locations in 2018.

These were the latest in a wave of new developments made by the e-tailers as they compete to dominate the future of grocery shopping in China. Brick-and-mortar stores can help them pursue their grand supermarket ambitions by functioning as warehouses for online fulfillment in urban areas, allowing them to offer same-day delivery. L2’s Digital IQ Index: CPG China finds that items sold through Alibaba’s Tmall Supermarket platform already take up significant portions of Tmall’s best-seller shelf. Chinese brands Blue Moon and Sofy have especially benefited from best-seller shelf visibility on Tmall Supermarket.

While Amazon recently had to cancel its Amazon Fresh service in some parts of the US, JD.com reported last year that JD Supermarket is now China’s largest supermarket by sales volume — not only online, but offline as well. Alibaba and JD.com were both beefing up their omnichannel grocery capabilities with brick-and-mortar partnerships and investments long before Amazon bought Whole Foods. JD.com’s stake in supermarket chain Yonghui, purchased in 2015, and its strategic alliance with Walmart, launched in 2016, both gave JD.com the opportunity to take on the online order fulfillment for these retailers. Alibaba also pursued omnichannel grocery opportunities with its November 2016 investment in supermarket chain Sanjiang and its February 2016 partnership with retail conglomerate Bailian Group.

The efforts have intensified in the past year. In the same month Amazon acquired Whole Foods, Alibaba bought an 18% stake in Lianhua Supermarket, and then purchased a 36% stake in China’s largest hypermarket chain Sun Art Retail Group in November 2017. In addition to delivery logistics, these partnerships, as well as the e-tailers’ own 7Fresh and Hema chains, provide access to a trove of data on offline purchases, as well as the opportunity to integrate cashless payment, create integrated inventory management, feature O2O promotions, offer click and collect, and more.

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