Costco and Alibaba do China deal

Costco has extended its product offering to shoppers in mainland China by establishing a storefront on the Tmall e-commerce platform operated by Alibaba Group.



Alibaba has been the focus of considerable attention in the U.S. of late due to last month’s highly anticipated initial public stock offering. Costco’s relationship with Alibaba’s Tmall Global platform, an extension of Tmall.com, will allow it initially to sell products in food and healthcare categories and its private label Kirkland Signature brand. Tmall Global allows overseas brands and retailers to establish presence on Tmall.com without the need for physical operations in China.



“Costco sees tremendous growth opportunities in China, especially in light of Chinese consumers’ increasing appetite for imported products,” said Costco EVP Jim Murphy. “We have chosen a great partner, Alibaba, for the official launch of Costco's fagship store. Our Tmall Global flagship store will give Chinese online shoppers a channel to purchase directly from Costco.”



Through Costco’s thorough analysis of Chinese consumers and Alibaba’s expertise in big data, Costco said it will carefully select the most suitable products and brands for its consumers in China at highly attractive prices.



“As Tmall.com and Costco deepen their collaboration, Tmall.com will connect Costco with our Group’s C2C platform, Taobao and group-shopping site, Juhuasuan. Together, we will develop and explore innovative market campaigns to unlock Costco’s membership value,” said Maggie Wu, general manager of the international B2C division of Alibaba Group.



Alibaba initially created Tmall as part of its Taobao Markeplace in April 2008 in order to provide increasingly sophisticated Chinese shoppers a high quality shopping experience for top quality branded products. In June 2011, Alibaba established Tmall as an independent platform.



Alibaba Group COO Daniel Zhang said the partnership with Costco, “will help give Chinese consumers a better shopping experience, and will enable us to better support the expansion of cross-border retail sales of consumer goods into China.”