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HANGZHOU, China — Costco Wholesale Corp. has entered the China market by opening a store on Tmall, a Chinese-language online marketplace operated by Alibaba Group.
Costco Wholesale Corp. has entered the China market by opening a store on Tmall, a Chinese-language online marketplace operated by Alibaba Group.
Alibaba’s Tmall Global platform allows overseas brands and retailers to establish a presence on Tmall.com and other online marketplaces without having to have a physical presence in China.
Costco will use the platform to offer health and beauty aids, dietary supplements, baby care goods, household items and the retailer’s private label Kirkland Signature products to Chinese consumers.
Costco said it would continue to introduce products and brands demanded by Chinese shoppers.
"Costco sees tremendous growth opportunities in China, especially in light of Chinese consumers’ increasing appetite for imported products," said Jim Murphy, Costco’s executive vice president.
Alibaba, China’s largest e-commerce company, doesn’t sell products itself. It earns some of its revenue by charging merchants for advertisements on its online marketplaces, including Tmall and Taobao.
"As Tmall.com and Costco deepen their collaboration, Tmall.com will connect Costco with our group’s C2C platform, Taobao, and group shopping site, Juhuasan," said Maggie Wu, general manager of Alibaba’s international B2B division.
Costco last week reported better-than-expected earnings for its fiscal fourth quarter after a year of disappointing bottom-line results, thanks in part to a boost from e-commerce.
Costco’s online sales rose 18% in the quarter, compared with 6% for the company as a whole. And Costco’s online sales are more lucrative, Richard Galanti, the company’s chief financial officer, told analysts in a conference call.
Online sales represented 3% of Costco’s $110 billion in sales in its fiscal year through August.
