Five years after a failed attempt to penetrate China, Sainsbury’s has announced that it will work with Chinese e-commerce giant Alibaba to sell a limited number of products in the country.
“We are trialling a small number of ambient products for sale on the Alibaba platform, including So Organic and Taste the Difference lines, for sale through the Chinese online market,” said a spokesman.
These will include more upmarket items that are not readily available in the country. Sainsbury’s said this would be its speciality tea range, coffee and biscuits as well as So Organic and Little Ones baby products.
The trial started last week and Sainsbury’s said it has “been pleased with the uptake so far”.
These items will however be sold online only and Sainsbury’s made it clear this would not lead the company opening any physical stores in the country.
In 2010, the Sainsbury’s had contemplated making moves into China - but this never fully materialised as broader expansion into the country was in effect put on hold.
Sainsbury’s is something of a late-comer to the Chinese market as a number of companies, including Walmart, Carrefour, Auchan, Tesco and South Korea’s Lotte, already have established businesses in the country.
The spokesman said: “We wanted to explore the online platform as we know through Alibaba that it’s a strong channel, particularly when customers are looking for organic/high-quality products - for example ranges like Taste the Difference.”
China is potentially a highly lucrative market, with a population of more than 1.3 billion and a host of recent food contamination issues that have geared consumers toward wanting broader choice.
But access to the country is difficult given the tight governmental controls in imports and exports.
It also comes at a difficult time for the Chinese economy, which is experiencing a sharp slowdown as consumers begin to spend less.
Just this week, Alibaba said its core online shopping business would likely slow, denting the company’s online sales volume for the current quarter.