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Japan's Stripe enlists Alibaba for 'smart' clothing store

The apparel merchant and the e-tailer aim to pool physical and virtual shop data

Stripe International expects sales of about 100 million yuan this year from its 20 apparel stores in China, including this shop in Shanghai.

TOKYO -- Casual clothing company Stripe International will open a "smart store" in China with leading online retailer Alibaba Group Holding as soon as October, seeking to pool data from virtual malls and real-world technologies like sensor-equipped hangers.

The partnership looks to be the first of its kind between Alibaba and a Japanese clothing retailer. The Chinese e-tailer's founder and chairman, Jack Ma, espouses a concept of "new retail," which involves improving physical stores with tech and data from the 550 million annual customers of the company's Tmall digital storefront, plus its mobile payment platform Alipay.

Staff from both companies will create a roughly 60-sq.-meter shop stocked with garments from Stripe's mainstay Earth Music & Ecology brand. Candidate sites include Harbin, a city in northeastern China's Heilongjiang Province.

Shoppers will be asked to create a digital Earth Music & Ecology account that becomes added to a database. For Tmall users, their Earth account data will be combined with shopping history and other information from the virtual marketplace.

Staffers will wield devices equipped with various information, potentially including visitors' purchase history. Alibaba and Stripe foresee workers suggesting items a specific customer likely will want, while shoppers find clothes they like more easily.

The partners intend to do away with a traditional checkout area, having clerks handle transactions through Alipay and other digital payment services.

Stripe looks to improve its product lineup through data gathered on the store side. Smart hangers will detect when customers pick them up, letting the store track which items are selling or at least attracting interest. Smart mirrors will let shoppers see what clothes look like in different colors, while facial recognition cameras help parse the gender and age range of the customer base.

Providing the in-house technology offers Alibaba valuable insight, such as generating data from a bricks-and-mortar clothing store. Stripe makes and sells its own private-label clothing, and may be able to apply data gleaned from the web and physical stores to manufacturing.

Stripe has about 1,400 stores at home and abroad. Group sales for the year ended in January totaled around 133 billion yen ($1.2 billion). Sales from the 20 locations in China are expected to reach about 100 million yuan ($15.4 million) for 2018. Yet the company continues to run in the red on a net basis. Stripe turned to Alibaba for help building stores with more competitive power, and it likely will replicate the smart-store model elsewhere if successful.

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