China: Unilever strikes deal with Alibaba to expand business operations

The partnership, first iterated in 2011 when Unilever, which owns more than 400 brands in food, personal care and other fast-moving consumer goods categories, opened a virtual store on Alibaba’s Tmall.com online shopping website.

The new agreement aims to help Unilever reach more customers in China, with an emphasis on gaining exposure to consumers in the countrys less-developed regions, where spending power is rising. Unilever hopes to tap into demand among rural consumers for products that currently can only be met by selling through the internet.

Alibabas ecommerce ecosystem includes China’s online retail marketplaces Tmall and Taobao Marketplace as well as logistics and online payment solutions, cloud computing and a marketing technology platform, Alimama, that gives retailers the ability to analise vast amounts of consumer data to optimise China branding and merchandising.

Online shopping accounted for 10.7% of total retail sales in China in 2014, according to data from China’s National Bureau of Statistics. With ecommerce growing faster than the overall retail market, new players are seeking ways to boost growth by selling fast-moving consumer goods directly to consumers online.

Alibabas cross-border system gives international retailers merchandising flexibility because shipments are made only on demand, reducing the need for sales forecasts and costly warehouse space in China. Pushing to expose Chinese consumers to more products from overseas, Alibaba Group said in June, 2015 that it will launch nearly a dozen country “pavilions” on Tmall Global.