Smartfoods seals NZ$4.5m sourcing deal with Alibaba Group following Double 11 success

By Tingmin Koe contact

- Last updated on GMT

Smartfoods have signed a 20m RMB (NZ$4.5m) sourcing agreement with Alibaba’s Tmall to distribute its cereal products. ©GettyImages
Smartfoods have signed a 20m RMB (NZ$4.5m) sourcing agreement with Alibaba’s Tmall to distribute its cereal products. ©GettyImages
New Zealand food producer Smartfoods has signed a lucrative deal with Alibaba’s Tmall on the back of previous success with smaller e-commerce platforms.

The agreement is for 20m RMB (NZ$4.5m) worth of Vogel’s cereal, a product of Smartfoods, to be sold directly to Alibaba for sale through their e-commerce channels, including TMall direct import.

The cereal will be sold over the course of 12 months, available to 515 million annual active customers on Alibaba’s e-marketplaces.

The signing ceremony took place at an event which was attended by Alibaba Group CEO Daniel Zhang in Melbourne last week.

Justin Hall, managing director of Smartfoods and Alvin Liu, general manager of Tmall Import and Export signed the agreement.

Nine other Australasian companies were invited to participate. However, Smartfoods was the only New Zealand representative.

Hall believes that Vogel’s cereal was hand-picked to sign the deal due to the brand’s sustained growth in China, and its track record of e-commerce success.

Smartfoods has been selling Vogel’s cereals in China via Alibaba for six years. Sales were initially conducted through small Taobao traders and Daigou.

In 2016, Smartfoods launched its Official Overseas Flagship store on TMall.hk and sales have accelerated since, especially during China’s Double 11 Shopping Festival last November, which culminated into more than NZ$1m of Vogel’s exports. 

Hall commented that Alibaba was a key channel for their future growth, and will assure consumers of both greater accessibility to their products and an enhanced shopping experience.

“Chinese consumers are interested in healthy imported foods and are buying more of their food online than ever before… Alibaba’s e-marketplace gives us unconstrained access to Chinese consumers and cements Vogel’s position as a leading imported healthy food brand in China,”​ he said.

Since commencing trade in 2004, Smartfoods has expanded at a compound annual growth (CAGR) rate of 23% with over 50% of revenue now coming from exports.

Alibaba e-commerce’ success

Alibaba continues to be a popular e-commerce platform, as seen from continued growth in its gross merchandise volume (GMV) during last year’s Double 11 Shopping Festival.

There was a total GMV increase of 39%​ as compared to 2016. Mobile users also played a bigger role, with mobile GMV accounting for 90% of last year’s total GMV, as compared to 82% in 2016.  

More than 140,000 brands and merchants took part in the festival, which is 40,000 more as compared to 2016.

Japan, Australia, South Korea, the US and Germany were among the top countries selling items to China from a total of 225 countries and regions.

"More than $25b of GMV in one day is not just a sales figure,"​ commented Zhang. "It represents the aspiration for quality consumption of the Chinese consumer, and it reflects how merchants and consumers alike have now fully embraced the integration of online and offline retail."

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