Firms target shoppers with rising incomes, global tastes
Alibaba Group Holding and Germany-based retailer Metro AG announced a cooperation agreement on Tuesday that gives Metro access to open a flagship store on the Chinese e-commerce giant's online marketplace Tmall Global.
The partnership will help Metro become more local while aiding Alibaba's internationalization, said experts.
They will work together in cross-border e-commerce, commodity supply chains and data sharing, according to a press release sent to the Global Times by Alibaba.
"This partnership will encompass collaboration in areas including cross-border e-commerce, logistics, rural e-commerce, online supermarkets and online-offline initiatives," said Alibaba CEO Zhang Jianfeng.
Metro will establish a "German pavilion" online sales channel on Tmall Global, a business-to-customer online platform under Alibaba. The pavilion will directly offer overseas goods - especially more high-quality German products - to Chinese consumers.
Alibaba said that it would assist Metro with its expansion in China's e-commerce industry.
"E-commerce is one of our strategic growth drivers in China. Opening the flagship store on Tmall Global shows our clear confidence in the Chinese market, where we hold a solid commercial position," Olaf Koch, board chairman of Metro, was quoted in the joint press release as saying.
Metro operates more than 80 locations in 56 cities in China. The retailer said it generated 18.9 billion yuan ($2.97 billion) in sales in China during the fiscal year ended September 2014, up 11.2 percent year-on-year.
"Metro's latest move shows its confidence in the huge potential of China, driven by demand for overseas products," Liu Xuezhi, analyst at Shanghai-based Bank of Communications, told the Global Times on Tuesday.
Liu said Chinese consumers were quickly becoming more affluent and ready to buy high-quality overseas goods. Liu also noted that the 367 million consumers on Alibaba's online shopping platforms provide an attractive customer pool for Metro and can support its business growth.
Separately on Tuesday, Alibaba's rival JD.com Inc, which is China's second-largest online retailer, signed a strategic cooperation agreement with Lotte.com Inc, allowing South Korea's leading online shopping site to sell various products to JD customers via the Chinese company's online marketplace, according to a press release issued by JD on its website.
China's cross-border e-commerce has developed quickly in recent years. Transactions reached 3.75 trillion yuan in 2014, up 38.9 percent year-on-year, according to a report by Beijing-based market research firm Analysys International released on July 14.
"Favorable government policies and the FTA [free trade agreements] that China signed with South Korea and other countries have boosted China's cross-border e-commerce," said Liu.
Liu forecast the growth rate for China's e-commerce sector would accelerate in the coming years, with consumers seeking more choices and increased customization.
Qiu Yanying, chief analyst at Shanghai VStone Capital Co, a private asset manager, took a slightly different view.
"China's cross-border e-commerce will continue growing, but more slowly and steadily. E-commerce is no longer an emerging industry - it is a mature sector," Qiu told the Global Times Tuesday.
Also, increasing cooperation between e-commerce companies and physical shops can be expected, and this trend can boost the real economy, said Qiu. "The two groups will pursue a win-win situation rather than a zero-sum game."
On August 11, Alibaba signed a partnership with Chinese leading electronics retailer Suning Commerce Group Co, taking a big step toward the integration of online and store-based shopping.
