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Alibaba has outlined two initiatives to bring US$200bn worth of international products into China over the next five years.
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).
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.
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.
Subscribers can read more on Alibaba's Strategic Outlook here.