Alibaba has opened its first physical store in Europe on institutional landlord Intu’s Xanadú scheme in Madrid.

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AliExpress combines physical and online retailing, Intu said

The AliExpress store is a collaboration between two Chinese businesses: retail giant Alibaba Group and D.Phone, a mobile phone and accessories retailer.

D.Phone will serve as a strategic partner in operating the store and assisting AliExpress with commercial innovation.  

According to Intu, the store will combine physical and online retailing, and offer a “vast range of technology and electronics products, including small appliances, household items and wearables”.

Matthew Roberts, Intu chief executive, said: “The fact that one of the biggest retail platforms in the world has chosen Intu for its first physical presence in Europe is testament to the desirability of our winning destinations. This is the latest development in a growing trend where online retailers are taking physical space in high-footfall destinations to improve their connection with customers.

“The new store complements the very best retail mix already available at Intu Xanadú, alongside best-in-class leisure offerings such as Atlantys Aquarium, Nickelodeon Adventure, and the only indoor ski slope in Spain, ensuring that we are able to give our visitors the perfect day-out experience.”

The announcement is a boon for Intu, which has struggled this year with plummeting rental income off the back of retailer CVAs and administrations.

In the six months to June 30, Intu’s net rental income slumped 17.5% to £205.2m, which drove underlying earnings down 32.1% to £66.4m.

Footfall, however, did grow 3.5% across its Spanish malls.

In response, Intu announced what it dubbed a “transformational” five-year strategy in a bid to arrest plummeting rental income and protect its asset values. It said the strategy would place “initial focus” on residential, hotel and flexible working space occupiers, rather than traditional high street retailers.