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Alibaba, Fung Retailing Ink Partnership to Bring Brands to China

Seeking to bring more international lifestyle brands to China, Fung Retailing Ltd., with a global network of more than 3,000 stores, has joined forces with online giant Alibaba Group Holding Ltd. in a strategic partnership aimed to meet Chinese consumers’ increasing thirst for global brands.

The collaboration, which the companies said builds on both of their strengths in online and traditional retailing, combines Fung Retailing’s global portfolio of brands, offline retail channels and marketing acumen with Alibaba’s structural foundation, digital experience and technology, and consumer insights from its roughly 600 million users.

The deal enables the brands to draw on Alibaba’s new retail channels, such as Tmall and Intime, along with Fung Retailing’s retail network, to manage and potentially reduce the costs, risks and time traditionally associated with entering the Chinese market. Under the partnership agreement, both companies will collaborate on global brand recruitment and offer brands merchandising, marketing and omnichannel distribution services. The companies said they will focus on the mainland China market as a first step and potentially expand to other regions on Alibaba’s platforms.

“We endeavor to help global brands expand their foothold in the China market by fully integrating Alibaba’s strong capabilities in new retail, big data and technology with Fung Retailing’s unparalleled advantages in brand and supply chain resources,” Alibaba CEO Daniel Zhang said Tuesday during the signing ceremony at the China International Import Expo in Shanghai.

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Sabrina Fung, group managing director at Fung Retailing, said with the rapid changes in retailing, “and faced with changing consumer behavior and disruptive retail technologies, we are focused on developing new ways to do business.”

At the expo, Zhang also said Alibaba Group—which had revenue of $39.9 billion in the fiscal year ended in March—has committed to help import $200 billion worth of goods from more than 120 countries over the next five years as part of the company’s efforts to meet the rising demand among Chinese consumers for high-quality international products.

“Globalization is one of Alibaba’s most critical long-term growth strategies,” Zhang said. “We are building the future infrastructure of commerce to realize a globalized digital economy where trade is possible for every country around the world. Leveraging Alibaba’s innovative technology and robust ecosystem, we are committed to making global trade more inclusive and fulfilling our mission ‘to make it easy to do business anywhere’ in the digital era.”

The Fung Group’s privately held Fung Retailing business extends from Greater China to the U.K., France, South Korea, Singapore, Malaysia, Thailand and the Philippines through a combined network of stores. They include stores operated separately and independently by Convenience Retail Asia Ltd., Trinity Ltd., Branded Lifestyle Holdings, Fung Kids, Toys “R” Us (Asia) Ltd., Suhyang Networks Co. and UCCAL Fashion Group. Fung Retailing’s annual sales exceed $1.8 billion.