Another western retailer has tied up with Chinese ecommerce operator Alibaba to sell products on its Tmall website.

Another western retailer has tied up with Chinese ecommerce operator Alibaba to sell products on its Tmall website.

Australia-based Metcash has joined the fray, selling staple food items such as Weet-Bix, Uncle Tobys Oats, honey, long-life milk and infant formulas. The company joins other retailers, such as the UK’s Sainsbury’s and Netherlands-based Ahold, in offering products online in China.

Selling products on the Alibaba website is worth trialling for several reasons: there is obviously a strong demand for western products in China; other retailers are moving to sell products via the site; and there is limited red tape due to the way the Tmall business is set up (it allows foreign companies to sell products online without registering a physical presence in the country).

Food safety

It is no surprise to see Metcash offering its private-label milk and infant formula lines – as are Ahold and Sainsbury’s – with Chinese consumer demand for these products extremely high following a series of high-profile food safety scandals in recent years.

Moreover, Metcash is facing a tough trading environment back at home, with harsh competition from the likes of Coles, Woolworths (AUS) and Aldi – which is rapidly expanding its presence in the country – so any international sales growth would be welcome.

For Alibaba, the move gives it greater exposure to western goods and international growth. It is also a sign that the company is looking to even further diversify its business into various new sectors.

This is also evidenced by Alibaba’s recent move to bring in a former Tesco executive (Amee Chande, former head of the Nutri Centre business in the UK) to head up its nascent UK operation.

We await the outcome of these trials with interest and expect Alibaba to look to tie up with other western retailers in the future.

  • David Gray, analyst, Planet Retail