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Costco set to enter China through Alibaba's Tmall

16
Oct '14

Costco Wholesale Corporation, an American warehouse club that provides a wide selection of merchandise, is set to enter China through an online flagship store named Tmall.com, a Chinese third-party platform for brands and retailers, owned by Chinese-ecommerce giant, Alibaba Group.

Through the launch, Costco would be offering its products to consumers in mainland China for the first time. Initially, Costco will provide a range of products that provide a perfect combination of quality and price to members every day, according to a statement.

As per the agreement, Costco will continue to introduce new products and brands to Chinese consumers, while Tmall.com’s bonded warehouse model will help Costco to reduce logistics costs and shorten delivery time.

Through Costco’s thorough analysis of Chinese consumers and Alibaba Group’s expertise in big data, Costco Wholesale Corporation will carefully select the most suitable products and brands for its consumers in China at highly attractive prices.

Costco Wholesale Corporation’s executive vice president, Jim Murphy, said, “Costco Wholesale Corporation sees tremendous growth opportunities in China, especially in light of Chinese consumers’ increasing appetite for imported products. We have chosen a great partner, Alibaba Group, for the official launch of Costco’s Flagship Store. The online store will give Chinese online shoppers a channel to purchase directly from Costco Wholesale Corporation.”

Alibaba Group’s chief operating officer, Daniel Zhang, said, “On behalf of Chinese consumers and Tmall.com, I would like to extend a warm welcome to Costco Wholesale Corporation. This important partnership will help give Chinese consumers a better shopping experience, and will enable us to better support the expansion of cross-border retail sales of consumer goods into China.”

Maggie Wu, the general manager of international b2c division of Alibaba Group, said, “As Tmall.com and Costco Wholesale Corporation deepen their collaboration, Tmall.com will connect Costco Wholesale Corporation with Alibaba Group’s C2C platform, Taobao and group-shopping site, Juhuasuan. Together, we will develop and explore innovative market campaigns to unlock Costco’s membership value.”

Costco Wholesale Corporation operates an international chain of membership warehouses that carry quality, brand name merchandise at substantially lower prices than are typically found at conventional wholesale or retail sources.

Tmall.com allows overseas brands and retailers to sell their products online without the need for physical operations in China, hence addressing the increasing demand for foreign brands by Chinese consumers. (GK)

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