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Woolworths to Tap Chinese Consumer with Online Tmall Shop

Woolworths wants a piece of the growing Chinese e-commerce market and the Australian supermarket chain plans to get it by setting up shop on China’s Tmall Global.

The business to consumer platform owned by Alibaba Group that lets foreign brands sell online in China will play host to a Woolworths store front selling roughly 80 of the retailers products—some of which were already being sold on Tmall Global via other retailers.

“Woolworths has established a store on the site to sell a small, selected range directly to Chinese consumers,” the Sydney Morning Herald reported a Woolworths spokesperson as saying. “Woolworths is Australia’s leading online retailer and we are continuously scoping new options for our online businesses. While we have no significant plans for Tmall at this stage we will no doubt benefit from the experience it brings.”

E-commerce company eCargo Holdings will build and manage Woolworths’ Tmall store front, and coordinate its inventory, packing and distribution requirements, the Herald reported.

The move comes just days after China and Australia announced the finalization of their free trade agreement that will ultimately allow 96 percent of Australian goods destined for China to enter duty free.

Tmall Global is an offshoot of China’s larger Tmall platform, but Tmall Global attracts a Chinese consumer with more disposable income to spend on genuine international products. And with a flourishing middle class population, demand for international goods is increasing.

Woolworths’ Tmall Global store may not bring in sizeable revenues in the near term, according to the Herald, but it gives the retailer a foothold in the Chinese e-commerce market, which is slated to more than double to $1.5 trillion in the next three years.

“It’s a trial to understand which Australian products Chinese consumers are looking for and where the demand is coming from,” Ian Morrice, managing director of Metcash, Australia’s leading wholesale distribution and marketing company that also has a Tmall Global set up, told the Herald. “There may be an opportunity for us to provide a very important role for Australian suppliers to access that burgeoning Chinese market.”