In an effort to capitalise on the growing Chinese demand for high-quality Australian produce, Australia’s largest supermarket chain Woolworths Ltd has launched a shop on the Alibaba-owned Tmall Global.
Woolworths engaged China-based e-commerce company eCargo to build and manage the storefront, including coordinating inventory, packing and distribution, and advising on brand strategy and marketing.
A Woolworths spokesperson said that a number of Woolworths products were already being sold by other retailers through Tmall. As a result, the Tmall store was established to sell a select range directly to Chinese consumers.
The storefront currently sells about 80 products including milk powders, baby formula and vitamins.
Chinese demand for foreign milk and baby products has grown massively in the past few years, with black-market-style buying leading to shortages and limits on customer purchases of baby formula in some Australian supermarkets. However, a Woolworths spokesperson confirmed that the sale of baby formula through Tmall was not linked to the recent Australian shortages.
The value of online retail in China is expected to more than double over the next three years to reach nearly US$1.5 trillion, according to eMarketer. This massive growth, coupled with China’s increasingly affluent middle-class consumers and growing demand for high-quality food products, means that Australian retailers are gaining access to a huge market, especially as trade restrictions ease between China and Australia.
“We believe the food and groceries segment will experience huge growth in the coming years between Australia and China, as cross-border trade restrictions ease and the China-Australia FTA takes effect,” said eCargo Chairman John Lau.
Woolworths’ launch on Tmall Global follows a similar move by Australian grocery and liquor wholesaler Metcash, which started selling through Tmall in October 2015.
Tmall has been receiving attention from a range of retailers worldwide looking to cash in on the massive growth of China’s online retail sector. Companies like Amazon, Macy’s, Costco, and Germany’s Metro have all recently set up shop on Tmall Global.