HONG KONG — The Alibaba Group, the Chinese online shopping giant, has become so big that it is looking for growth by forging into new territory: the offline world.
Alibaba has snapped up stakes in grocers and in an electronics chain over the past three years, a perhaps counterintuitive series of moves for a company that helps consumers in China buy products with their smartphones. In part, the push is driven by the eventual maturation of its online business.
For now, however, online shopping still rules the roost.
Alibaba on Thursday reported a one-third rise in profit for the three months that ended in December, on revenue that rose by more than half. The revenue growth rate was its slowest in a year but still came in better than expected.
Investors are betting that Alibaba’s run will continue. The company’s stock more than doubled last year, installing it firmly in the technology world’s major league. Alibaba’s market capitalization now exceeds half a trillion dollars, making it smaller than Alphabet and Amazon but comparable to Facebook and China’s other internet colossus, Tencent Holdings.
Still, a pullback in growth is inevitable for a company with Alibaba’s reach.
The company will have a harder time finding Chinese consumers who aren’t already online. Smartphone sales are flattening out. Although economic growth still looks strong — at least if the Chinese government’s figures are to be believed — Alibaba will have to work harder to rake in more revenue from its online marketplaces. Its other businesses outside retail, like online video and cloud computing, still lose money, and its overseas expansion hasn’t yet paid off.
The company has lifted its recent results by offering more and better services to the vendors on its platforms. But it is also eyeing the 84 percent of physical goods sales that still take place offline in China.
Alibaba has been pouring cash into experiments in what its founder, Jack Ma, calls “new retail”: a kind of teched-up re-envisioning of how people shop in store. In particular, it hopes to gather more detailed user data, which could help it offer more personalized services and ads to its customers online and off.
In that respect, the company has a head start on Amazon, which paid more than $13 billion for Whole Foods last year. In 2015, Alibaba struck a deal to buy a stake in Suning, an electronics retailer. It took control of Intime Retail, which runs department stores and malls, early last year. In November, it bought a $2.9 billion slice of Sun Art, one of China’s largest grocery operators.
These brick-and-mortar partners are being fitted with Alibaba’s technology. At the same time, the company is building its own chain of stores, called Hema Xiansheng — the name is a Chinese pun on “Mr. Hippopotamus” — that combine a fresh-food market, a restaurant and facilities for home deliveries. Alibaba also debuted a cashier-free minimart last July — well before Amazon opened its own automated convenience store last month.
“Some of Alibaba’s ‘new retail’ initiatives have shown quite promising signs of initial success,” said Jialong Shi, an analyst with Nomura, singling out Hema. Still, he said, “these initiatives may require a few more years of incubation before we can see profits.”
Another challenge: Tencent, Alibaba’s biggest rival, is getting into fresh food and traditional retail, too.
Tencent is the world’s largest video game company. It also runs WeChat, China’s most popular messaging and social media app.
But Tencent is also charging into the old-fashioned shopping business. In December, it bought a stake in Yonghui Superstores, a large supermarket chain. It is weighing an investment in the China operations of Carrefour, the grocer and retailer headquartered in France. It is also leading the purchase of a $5.4 billion stake in Dalian Wanda Commercial Properties, a mall operator and part of the troubled Dalian Wanda conglomerate.
For now at least, analysts do not expect Alibaba and Tencent to end up owning rival alliances of stores. Tencent primarily seems to want to create more opportunities for people to use its mobile payment service, WeChat Pay. It is also hunting for new clients for its cloud computing business.
“It’s very hard for me to imagine that Tencent would fully own and operate a supermarket on its own,” Mr. Shi of Nomura said.
For both Alibaba and Tencent, though, creating more points of contact with their customers helps them amass more user data. This is one reason the companies are investing heavily in artificial intelligence, which helps them make sense of the boatloads of user information they are hauling in every minute.
“They not only have the largest data sets, but they have data sets tied to customers that they can identify,” Kirk Boodry, an analyst with New Street Research, said. “The potential for A.I.-led monetization growth, we think, is still at a very early stage.”
Also on Thursday, Alibaba said it would acquire a one-third stake in the parent company of Alipay, one of China’s two main online payment services. The two sides agreed in 2014 to give Alibaba the right to acquire the stake. The two companies used to be one until Mr. Ma took the Alipay operations out and formed a separate company.