Costco to Make Debut in China with Help from Alibaba Partnership
CHINA - Costco will soon be entering the Chinese market for the first time thanks to a new partnership with e-commerce giant Alibaba. According to Forbes, America's largest warehouse chain will be opening a store on T-Mall, one of the online marketplaces which Alibaba owns and operates. This will allow Costco to market its wide line of consumer products to the immense Chinese market at “highly attractive” prices, all without opening a single physical store in the country.
“Costco sees tremendous growth opportunities in China, especially in light of Chinese consumers’ increasing appetite for imported products,” shared Jim Murphy, Costco’s Executive Vice President, underscoring the tremendous upside potential of this Chinese retail play.
According to Forbes, it can take between 5-20 days to deliver these goods to a Chinese consumer after a purchase is made. Despite the wait however, Costco is confident that many foreign consumers will be attracted to the quality of its imported products. Forbes notes how recent scandals in the domestic consumer market, such as melamine-tainted infant milk formula, have pushed many Chinese consumers into the arms of importers. Costco hopes to be the biggest beneficiary of this trend.
In China Costco is slated to face stiff competition from Wal-Mart however. Wal-Mart owns a majority stake in Yhd.com, an online marketplace which sold 250 million imported items in 2013 alone. In addition, Wal-Mart has revealed plans to expand its current line of 10 Chinese Sam's Club locations.
As of today, Costco has declined to share whether it plans on building a physical store in the future.
Stay tuned to AndNowUKnow for future updates on Costco's expansion into China.