Find out about the retailer's strategic priorities, commercial focus areas, channel and country presence.

See data on the retailer’s performance and forecasts for its operations by channel.

This in-depth guide to China explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

We review Alibaba's current performance, its growth forecasts for the next five years, plus progress against key strategic objectives.

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The Japan External Trade Organisation is offering small to medium-sized domestic retailers free access to global ecommerce platforms to help them sell products in 18 markets abroad.

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As an important move to capitalise on China’s massive tourism market and offer Chinese travellers a holistic travel experience, Alibaba is launching a new shopping platform called Fliggy Buy.

An innovative new service

The service allows Chinese travellers to choose from a range of products, including cosmetics, suitcases, bags and alcohol, prior to their international travel. They can then select a pick-up store, input their personal information and make the payment. After arriving at the destination, shoppers can pick up the goods at their leisure.

Information about the products and reviews are in Chinese. Shoppers have the opportunity to understand product features and compare prices across different channels before making the purchase.

In recent years, the focus of Chinese tourists are shifting away from shopping to local experience. The new service allows them more time to explore and experience the destination.

Why it is an important initiative

With US$115bn spent on international trips in 2017, 140mn oversea trips took last year and average spend up by +9% year-on-year in 2018, the new service offers brands and retailers an opportunity to capitalise on this massive market.

At current initial stage, duty-free and tax-free stores are the focus. Alibaba has plans to recruit more overseas merchants to including high-end luxury brands, household electronics retailers, pharmacy and cosmetics stores to enrich product offering.

As shoppers become more selective, targeted marketing becomes more important. Just as Roman Zhu, head of Fliggy Buy, commented:” The launch of Fliggy Buy represents our latest move to work with merchants targeting the vast number of tourists from China to develop innovative solutions and offer them targeted customer traffic. Our aim is also to embrace the potential of digital technology and provide a holistic travel experience encompassing food, accommodation, transportation, sightseeing, shopping and entertainment.”

 

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Alibaba has outlined two initiatives to bring US$200bn worth of international products into China over the next five years.

Offering new opportunities for suppliers from around the world

One of Alibaba's core missions is to make it easy to do business anywhere. In China, it looks to help different businesses enter the market and trade successfully. One route to market for suppliers is Tmall Global, a cross-border online platform. Alibaba has announced two solutions offered by Tmall Global to support international brands maximise opportunities for strong demand for quality products: Centralised Import Procurement (CIP) and Tmall Overseas Fulfilment (TOF).

Access to nearly 700m users on Alibaba platforms

The CIP program uses six centres Alibaba has set up across the world, sourcing imported goods for all the online and offline stores within Alibaba's economy, including Freshippo, Tmall and Intime Department Store. The program provides international brands access to a strong user base.

TOF allows brands to place a small order of products at one of the TOF centres to be sold on Tmall Global. This gives businesses to test, learn and optimise their assortment before investing further in China. TOF centres are currently available in Japan, South Korea and the U.S. Key to supporting fulfilment is Alibaba’s smart logistics network Cainiao, which will continue to expand its warehouses in China. It aims to triple its total size to 3m sq m in three years.

Wrapping customers and brands into the economy

Alibaba has a deep understanding of its shoppers. Its wide economy means that customers can access grocery, lifestyle and other amenities through different subsidiaries. Brands and suppliers working with just one division e.g. Tmall Global, have the option to integrate further by getting involved elsewhere in the economy. Alibaba's economy is also flexible, allowing different parts of the business to bolt onto the retailer's other channels. Tmall Global for example, can help brands drive awareness by tapping into Taobao Livestream.

Want to know more?

Subscribers can read more on Alibaba's Strategic Outlook here.

Following on from the announcement of its results, Sun Art has said its chief executive, Ludovic Holinier had resigned from his role. The retailer said Holinier will be replaced by Ming-Tuan Huang.

Huang to sustain recent strategy

At the moment, Huang is chairman of RT-Mart and is responsible for the overall strategic planning and management of the Group. He has also been CEO of RT-Mart Limited Shanghai where he is responsible for devising and implementing its overall strategies and the supervision of its business operations.

According to the press release announcing the change in management “The appointment of Mr Huang as the new general manager clearly shows the group's determination and confidence to revitalise its hypermarket and popularise New Retail.”

Will oversee further merging of RT-Mart and Auchan

One of Huang’s first responsibilities will be in implementing the creation of a single joint headquarters for RT-Mart and Auchan, which was announced in December 2018. The step will also see RT-Mart assist Auchan in upgrading its IT system and the supply chain as the two banners are integrated. However, the two companies are not being merged, with the step focused on ‘ improving the use of technology and management… with the purpose of enhancing efficiency of the Group.

 

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China’s major hypermarket operator Sun Art Retail Group Ltd, set up by Auchan and Ruentex and backed up by Alibaba, reported a 7.3% fall in 2018 profit.

Missing market expectations

The retailer reported its net profit fell to RMB2.59bn (US$386m) from RMB2.79bn (US$386m). This was below the expected RMB2.70bn. Turnover fell by 2.9% to RMB99.36bn and same-store sales fell 1.72% year-on-year. The group’s gross profit margin increased by 1.2 percentage point from last year to 25.3%.

2019 plan

The company, operating under the “RT-Mart” and “Auchan” banners, says that the competition is fierce including online. "2018 was a year where the digitalization of our retail business began, and also a year to plan future development," the company said in a statement. "Through digital management, supply will be closely tied with demand to provide customers with the right product offering, good prices..."

Just one day after publishing its 2018 results, Sun Art announced plan to open 25 more stores in China this year, aiming to return to positive growth in 2019.

 

 

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