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Foreign brands gain access to a big wholesale e-marketplace in China

June 1, 2015 01:25 PM
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Italian, Portuguese and South Korean luxury brands will soon be selling directly to Chinese retailers on 1688.com, Alibaba Group’s business-to-business wholesale e-commerce site, through a new initiative designed to streamline cross-border e-commerce and address the wants of China’s growing middle class.

The website will add products from Portugal, Italy and South Korea as Alibaba strives to build 1688.com into the largest sourcing platform in China for imported merchandise, Alibaba says. Until now, 1688.com has been a domestic online marketplace, where Chinese suppliers sold to Chinese wholesalers and retailers. In 2014, the total transaction volume on 1688.com was $22.7 billion; an updated figure was not immediately available.

1688.com will cooperate with Chinese customs and quality inspection administrators on product-tracking services, so buyers will be able to scan the QR codes of foreign products and get information on the product’s source, Alibaba says. Later this year, Alibaba will offer shipping and other logistics services through 1688, which it expects will help buyers save 20% to 40% on importing costs and 15 to 60 days in shipping times, a spokeswoman says.

1688.com’s expanded global sourcing program follows the implementation last year of Alibaba’s Direct from Overseas market initiative, which allowed 24 South Korean food and beverage brands to sell on the platform in October 2014 and an undisclosed number of Taiwanese brands to sell in August 2014. Luxury brands from Spain also began selling on 1688.com last month.

Alibaba’s efforts to feature more imported goods comes at a time when China is cutting the cost of imports through reduced taxes.

China’s trade officials announced on Monday that the country will decrease its import tax across several product categories as early as June 1, including:

●  Western-style clothing, to between 7% and-10% from 14% and -23%;

●  Ankle-high boots and sports shoes, to 12% from 24%;

●  Diapers and skincare products, to 2% from 7.5% and 5%, respectively.

●  Cosmetics, which will be reduced to an unstated rate from current tax rates of up to 30%;

China also pledged to facilitate imports through e-commerce channels such as 1688.com, streamline inspection and quarantine policies, and remove “unreasonable fees during the import process.”

Alibaba says that the introduction of foreign brands to 1688.com was also done in response to the Chinese government’s call to increase domestic consumption. China’s middle class is slated reach 630 million by 2022, an Alibaba spokeswoman says. As the buying power of this middle class increases, consumers are likely to move from buying generic brand products to buying the luxury brands they desire, she adds.

Meanwhile, 1688.com is designed to help sellers “ensure a stable product supply and avoid the hassle of looking for a middleman on their own,” Alibaba says.

Sign up for a free subscription to B2BecNews, a weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry. B2BecNews is published by Vertical Web Media LLC, which also publishes the monthly business magazine Internet Retailer. Follow Nona Tepper, associate editor for B2B e-commerce, on Twitter @ntepper90.

 

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