Woolworths extends its reach to China through Tmall

SUPERMARKET giant Woolworths is tapping into China’s insatiable demand for Australian food and grocery products.

Woolworths logo

WOOLWORTHS is tapping into China’s insatiable demand for Australian food and grocery products.

Australia’s largest supermarket chain has engaged China-based eCargo Holdings to build and manage a Woolworths storefront on Alibaba’s Tmall business-to-consumer online marketplace.

ASX-listed eCargo will also co-ordinate Woolworths’ inventory, packing and distribution requirements, advise on brand entry strategy and undertake a wide-range of digital and social marketing activities for the retailer.

Rising demand for high quality food and dairy products produced overseas, particularly from China’s affluent middle class has opened up a large market for Australian food and dairy products.

A Woolworths spokesman confirmed to News Corp Australia that the supermarket chain had already been selling a limited range of products on Tmall for a few weeks.

A search of the Woolworths Tmall site shows it is selling baby formula, Woolworths Select products including milk powder and sultanas, vitamins from Swisse and Blackmores, and Weet-Bix among other products.

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Natures Way Kids Smart infant formula sold on Tmall by Woolworths. Picture: Supplied

Nature Bubs goat toddler formula being sold by Woolworths on Tmall. Picture: Supplied

Woolworths’ sale of baby formula on Tmall comes after the supermarket chain was forced to reduce the sale of baby formula tins from eight to four per person in November this year.

Popular brands of baby formula in Australia that sparked a national shortage at the time included A2 Platinum and Bellamy’s Organic.

But a spokesman for Woolworths confirmed the two lines of baby formula being sold on Tmall were not linked to the shortages customers recently experienced in Australia.

He also confirmed a number of Woolworths products are being sold through other retailers on Tmall.

“As a consequence, Woolworths has established a store on the site to sell a small, selected range directly to Chinese consumers,” he said.

“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.”

Vitamins on sale ... Woolworths’ Tmall site sells these products. Picture: Supplied

eCargo Chairman John Lau said in a statement: “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.”

Woolworths online foray into China follows a similar move by smaller local rival Metcash, which set up shop on Tmall earlier this year to sell products such as Weet-Bix, Tim Tams, long-life milk and infant formula.

Woolworths already has a presence in the Chinese market after acquiring alcoholic drinks distributor Summergate last year for $US25 million.

In recent months, several popular global brands including Amazon, Macy’s and Germany’s Metro have set up shop over online market platforms run by Alibaba and rival JD.com, in an effort to cater to China’s growing appetite for imported consumer products.

The Chinese e-commerce market is forecast to more than double over the next three years to $US1.5 trillion, according to New York based research firm eMarketer.