Woolworths Ltd is setting up shop on Chinese online site Tmall.com (天貓), following the path of other overseas retailers, including Macy’s Inc and Costco Wholesale Corp, as Australia’s largest supermarket chain attempts to reverse declining earnings.
Sydney-based Woolworths has engaged eCargo Holdings Ltd to build a storefront on Alibaba Group Holding Ltd’s (阿里巴巴) Tmall, as well as coordinate inventory, packing and distribution, eCargo said in a statement to the Australian Securities Exchange yesterday.
The value of online retail in China is forecast to more than triple from last year to 10 trillion yuan (US$1.5 trillion) by 2020, according to a study by Bain & Co and Alibaba released last month.
Foreigners are chasing a slice of that market without incurring the cost of physical stores. For instance, China’s annual shopping bonanza — Singles’ Day — last month included cut-price Scottish oats from London-based J Sainsbury PLC and Dutch waffles from Royal Ahold NV on Tmall.
“The food and groceries segment will experience huge growth in the coming years between Australia and China,” eCargo chairman John Lau (劉石佑) said in the statement.
Woolworths has set up a store on the site to sell “a small, selected range directly to Chinese consumers,” a spokesman said in an e-mailed statement. “While we have no significant plans for Tmall at this stage, we will no doubt benefit from the experience it brings.”
Woolworths shares closed unchanged at A$23.57 in Sydney, trimming the stock’s decline this year to 22.5 percent.
ECargo more than tripled to A$0.34, taking the e-commerce company’s market value to A$166 million (US$119 million).
Woolworths, which has been trying to replace outgoing chief executive officer Grant O’Brien since June, in October said that profit in the first half of this financial year would fall as much as 35 percent.
Faced by increasing competition at home from Aldi discount stores and Wesfarmers Ltd-owned Coles, Woolworths chairman Gordon Cairns has said that a turnaround will take years.
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