Woolworths sets out wares on Alibaba-owned Tmall website to meet demand from Chinese population.
Alibaba has taken a measure to increase its market share. Woolworths would expand its reach into the growing middle class of China and its insatiable demand for Australian groceries and food items, including baby formula, after establishing an online shop on the Hangzhou based company’s Tmall, which is known as the largest business-to-business platform of the most populated country.
The Chinese enterprise eCargo Holdings, which got itself listed on the Australian Securities Exchange in 2014 following a $40 million IPO, announced yesterday that the Bella Vista grocery chain had engaged it to offer facilities to support the operations of the retailer in the Chinese consumer market.
The agreement has boosted the stock price of eCargo, boosting it by more than 300% to 41c before it closed at 23.5c, or 223.8% at 34 cents. Their price in the initial public offering was 40 cents each. The directors of the ecommerce solution provider include former director of Myer Rupert Myer, who took a stake in the recently floated enterprise.
eCargo would manage and establish the store of Woolworths on Tmall, the biggest business-to-consumer online market in the second largest economy and coordinate the Australian supermarket ‘s packing, distribution needs and inventory, advise on brand strategy plan and perform a variety of social and digital marketing activities for the seller.
It represents the maiden push of eCargo into the groceries and food sector – the most rapidly expanding sector in the digital trading industry. The developed Tmall Global webpage lets international corporations to sell through the internet without the need to have a physical organization in China, and grants access to these companies to more than 260 million listed buyers.
An online shopping boom in China has been driven by webpages like Alibaba’s Tmall Global and eBay-like Taobao that enables shoppers to purchase goods from abroad.
Woolworths would use the Tmall webpage to sell a small range of baby formula, with extensive demand for the product, considered secure and of high quality, contributing to shortages in Australian shops as organizations and people grab tins to deliver in China.
A spokesperson of Woolworths stated, “We found a number of Woolworths products are being sold through other retailers on Tmall. As a consequence, Woolworths has established a store on the site to sell a small, selected range directly to Chinese consumers. While we have no significant plans for Tmall at this stage, we will no doubt benefit from the experience it brings.”
Chief executive of eCargo, Christopher Lau, said the partnership with the grocery chain has marked a milestone for the growth of the company into groceries and food sector. The management is content about the deal and plans to move ahead in the sector.
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