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Japan's Aeon teams up with Alibaba-backed startup on AI-run stores

Aeon envisions unstaffed Chinese minimarts and smarter shopping centers

Japanese retailer Aeon operates about 430 supermarkets, convenience stores and other locations in China.

TOKYO -- Aeon, Japan's biggest retailer by sales, will join forces with an Alibaba-backed technology company to develop models for stores in China powered by artificial intelligence.

The Japanese group operates about 430 supermarkets, convenience stores and other locations in China. Its latest move in the Chinese market seeks to counter Amazon.com and other big names that are experimenting with high-tech store formats.

Next month, Aeon will form a joint venture with Shanghai-based DeepBlue Technology, a startup that counts Jack Ma's Alibaba Group Holding as an investor and has developed a model for an unmanned convenience store called TakeGo.

Users register a hand print, which lets them access the kiosk-like store and pay for purchases. A scanner at the store recognizes shoppers by the unique pattern of their palm veins.

Aeon will invest about $1 million in the venture, taking a 65% stake. The Japanese retailer seeks to use DeepBlue's technologies to develop its own small-format stores as well as shopping centers.

Ideas for such smart malls include using combinations of sensors and cameras to detect which items a shopper has selected, letting the person check out automatically. Robot vacuum cleaners could be programmed to spend more time cleaning high-traffic areas. Outside, the mall could recognize an arriving car and direct it to available parking based on the driver's shopping destination.

Aeon is considering a similar partnership domestically with Japanese technology company SoftBank Group, while convenience store operator Lawson is preparing to open locations in Japan that use automated cash registers during overnight shifts.

Amazon.com's purchase of U.S. supermarket chain Whole Foods Market last year brought renewed attention to the fusion between e-commerce and bricks-and-mortar retail. E-commerce operators have vast troves of customer data that can be mined to improve efficiency at physical stores, which play a complementary role as distribution centers.

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