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Woolworths taps Chinese market with online store
23
Dec '15
Australian supermarket giant Woolworths has joined the race to tap into the Chinese appetite for Australian products by opening an online store on Chinese website Tmall Global. It has engaged China-based eCargo Holdings to build and manage a Woolworths storefront on Alibaba's Tmall B2C online marketplace, the Australian media has reported.

Woolworths launched the store early this month with little fanfare, selling around 80 Woolworths and branded products including powdered milk, baby formula and vitamins.

ASX-listed eCargo will co-ordinate Woolworths' inventory, packing and distribution requirements, advise on brand entry strategy and undertake a wide-range of digital and social marketing activities for the retailer.

Rising demand for high quality food and dairy products produced overseas, particularly from China's affluent middle class has opened up a large market for Australian food and dairy products.

“Woolworths has established a store on the site to sell a small, selected range directly to Chinese consumers,” a spokesman said.

“While we have no significant plans for Tmall at this stage we will no doubt benefit from the experience it brings.”

According to one report, baby formula bought at Woolworths ends up being sold online in China at a big markup. There's big demand for “clean” goods from Australia, including vitamins. It's understood Woolworths will first be selling its own home brands.

China's total retail e-commerce sales would increase 133 per cent to $1.568 trillion in 2018, up from an estimated $672 billion this year, according to eMarketer.

Woolworths has been struggling, reporting flat sales as it deals with a more competitive market in Australia. In the first quarter, sales rose just 0.4 per cent to $11.064 billion for food and liquor. Woolworths expects profit to fall to between $900 million to $1 billion in the first half of 2016, a 28 per cent to 35 per cent drop when compared to the same six months last year.(SH)

Fibre2Fashion News Desk – India

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