Alibaba opens a showroom for foreign goods in China

January 12, 2016 01:16 PM

China has made it easier for its citizens to buy goods from foreign e-commerce sites in recent years, and now the country’s biggest e-commerce company is giving them a place where they can see those goods before purchasing.

Alibaba Group last week opened a store in China’s Tianjin Pilot Free Trade Zone, one of 10 such zones the government has authorized since 2013 where foreign companies can warehouse goods without sending them through customs. When an online shopper orders an item, the retailer sends the product through an expedited customs process and then arranges delivery to the consumer, usually within a couple of days.

The Alibaba store covers about 6,500 square feet and displays more than 1,000 of the best-selling products on Alibaba’s web marketplaces for imported goods, Tmall Global, a shopping site Alibaba launched in 2014.

The store displays products in pavilions, based on country of origin, with sections devoted to products from the United States, Japan, Korea, Europe, Australia and New Zealand, and the rest of Asia. Products in the store include Kao brand diapers from Japan, GNC nutrition products from the U.S., Paratex latex pillows from Thailand, LG cosmetics products from South Korea and products from Metro AG of Germany, according to Tmall Global.

Consumers can try samples of the products in the store. If they want to make a purchase, they can use their smartphones to scan QR codes on each product, which takes them to a page on Tmall Global where they can buy the product.

Tianjin, about 78 miles northeast of Beijing, is a port city with a population of 15 million. A high-speed train from Beijing takes only 45 minutes to arrive in Tianjin, making the Alibaba retail outlet accessible to residents of China’s capital.

The Chinese government recently made Tianjin the tenth city to operate a free trade zone to make it easier for Chinese consumers to buy online from foreign brands and retailers through special cross-border e-commerce rules. While foreign companies can store merchandise in the free trade zones, they also can hold them offshore and then send products through customs when they are ordered. To encourage this cross-border online shopping, the government waives customs fees on purchases less than 500 yuan ($76), and in some cases 1000 yuan ($152), depending on the product. In addition, instead of paying the 17% national sales tax on these purchases, Chinese shoppers only pay a 10% tax, and that’s waived if it’s under 50 yuan ($8).

Besides Tianjin, the free trade zones are located in Shanghai, Ningbo, Zhengzhou, Chongqing, Hangzhou, Guangzhou, Shenzhen, Fuzhou and Pingtan.

More than 6,000 international brands sell into China via Tmall Global, a shopping portal that allows them to sell to Chinese web shoppers without obtaining a Chinese business license as long as they warehouse goods offshore or in the free trade zones. In the past several months, several global e-retailers, including Macy’s Inc., No. 7 in the Internet Retailer 2015 Top 500 Guide, Metro AG, No. 23 in the Internet Retailer 2015 Europe 500 began selling online in China by launching stores on Tmall Global.     

For a fuller report on the openings for foreign companies to sell online in China, see “Open Door Policy” in the November 2015 issue of Internet Retailer magazine.

For more Chinese e-commerce data, please click here for Internet Retailer 2015 China 500. 




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