Chief executive Mike Coupe disclosed the retailer was currently selling 50 products through the Alibaba website in China. “We’ve put a toe in the water in the Chinese market to find out how it works,” he told the grocery think tank IGD’s Big Debate in London. “So far, so good. But it is very early days and, at present, not really material to our business,” he added.
To date, the best-selling products were Sainsbury’s Red Label Tea, UHT milk and granola. “It shows either expats have got a propensity for the Great British breakfast or that the Chinese population have got a propensity for the Great British breakfast,” he quipped.
Tesco’s failed entry
Sainsbury’s Chinese enterprise follows Tesco’s failed entry into the China market. Last year Premier Foods formed a new international business unit to boost sales in three key areas: China, Australia and North America. The manufacturer had partnered with Swire Foods in China and was testing sales of Ambrosia in the Shanghai area.
Despite reports of the slowing growth of the Chinese economy, a report from research specialist Kantar Worldpanel documented the still impressive demand for fast-moving consumer goods (FMCG) in its Asian Brand Power 2015 report last month. While the pace of FMCG consumption in the world’s second largest economy fell by a third between 2012/2013 to 2014/2015, the market is still responsible for three quarters of total market growth in Asia.
Meanwhile, Alibaba has appointed its first UK md Amee Chande to help lead the firm’s European expansion. Increasingly affluent Chinese consumers were searching for quality, authentic international products and global brands, said Alibaba Group president Michael Evans. Europe was a logical first step with its diverse range of unique brands and high-quality products.
“We are putting in place a strong team of experts in our UK and Italian offices that will help European brands, retailers and government partners understand the opportunities in China and work directly with them in local language, in-country, to get their products into the hands of Chinese consumers,” he said.
New British md Chande brought a wealth of experience in the global retail sector to her role, said Alibaba. Previously md of NutriCentre, the health and wellness subsidiary of Tesco, Chande has also served stints as md of Staples UK and held senior roles at Walmart and McKinsey.
Sainsbury's top lines in China via Alibaba
- Sainsbury’s Red Label Tea
- UHT milk