Costco enters China
US discount warehouse club Costco is to enter China.
But instead of opening its hallmark bricks and mortar superstores, Costco will debut in the world’s most populous nation online.
It will open an online flagship store on Alibaba Group’s Tmall Global platform, an extension of Tmall.com, China’s largest third-party platform for brands and retailers. Tmall Global allows overseas brands and retailers to establish presence on Tmall.com without the need for physical operations in China, satisfying growing demand in China for foreign brands.
“As Tmall.com and Costco deepen their collaboration, Tmall.com will connect Costco with our 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,” announced Tmall in a statement.
Costco’s online store will extend its product offering to consumers in mainland China for the first time. Initially, Costco’s online store will offer products including food and healthcare lines at competitive prices and Costco’s private-label Kirkland Signature products.
Alibaba Group’s COO Daniel Zhang said the 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”.
Costco’s executive VP Jim Murphy added: “Costco sees tremendous growth opportunities in China, especially in light of Chinese consumers’ increasing appetite for imported products.”
Through Costco’s thorough analysis of Chinese consumers and Alibaba’s expertise in big data, Costco will carefully select the most suitable products and brands for its consumers in China at highly attractive prices.
Maggie Wu, GM of Alibaba’s international B2C division, added: “As Tmall.com and Costco deepen their collaboration, Tmall.com will connect Costco with our 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 will continue to introduce new products and brands to Chinese consumers while Tmall.com’s bonded warehouse model helps Costco to reduce logistics costs and shorten delivery time.
Tmall.com was launched in April 2008 as part of Taobao Marketplace and became an independent platform in June 2011. Thousands of international and Chinese brands and retail merchants have established storefronts on Tmall.com.