Imported goods sell briskly on Alibaba’s group-buying site
January 15, 2016 06:00 AM
More than 10 million Chinese consumers purchased 34 million products from foreign brands on Alibaba Group Holdings Ltd.’s Groupon-like group-buying site in the first nine months of 2015, Alibaba says.
Nearly half of those imported goods purchased on Juhuasuan.com were food products, and 77% of the purchasers were women. Studies show many Chinese consumers, especially those in the growing urban middle class, don’t trust the safety of Chinese food, skin care and nutritional products and often seek out foreign brands.
Juhuasuan, which means “center of good deals” in Chinese, is a good way for foreign brands to test whether certain products will sell well online in China, says Hagard Wei, CEO of Chinese e-commerce consulting firm Zhejiang Zhongpan eCommerce Co. “The site asks e-retailers to sells products for at least 10% off the regular price. But after a successful promotion, merchants can quickly generate traffic and sales for new products,” he says. He adds that because Alibaba presents products in search results on its giant Taobao and Tmall marketplaces in China based on a product’s sales record, “selling on Juhuasuan is an efficient approach to improve the traffic to stores on Alibaba’s sites.”
Alibaba says it charges a commission of 0.3%-5% of the value of a sale on Juhuasuan, which Alibaba launched in 2010. Purchases are completed on either the Taobao or Tmall store of the brand offering the product on Juhuasuan, and Alibaba does not report in its earnings report the value of goods sold on the group-buying site. Sales on Taobao and Tmall totaled $394 billion in the 12 months ended March 31, 2015, the end of Alibaba’s fiscal year, the company says. Those two massive marketplaces account for about 80% of online shopping in China.
Juhuasuan sold products from 53 countries in the first nine months of 2015, Alibaba says. In terms of sales, the top 10 countries on Juhuasuan were Korea, Japan, Germany, France, Netherlands, United Kingdom, New Zealand, Australia, Taiwan and Thailand.
Popular categories include foods, children’s products, nutritional products and home goods. In the past nine months, Juhuasuan’s consumers ordered 217,083 bottles of nuts from the Unites States, 768,793 boxes of diapers from Japan, 614,187 boxes of coffee from Malaysia, 613,399 boxes of milk from German and 355,937 bottles of wine from France, Alibaba says.
In one three-day sale 45,000 consumers bought Latex pillows from Thailand, according to Juhuasuan. Other best-selling products include the Huo12frm Juice maker from Korea, Kao brand diapers from Japan, Salus nutrition products and Brita water filters from Germany, Clinie skin care masks from Korea, and Dyson wireless vacuum cleaners from the U.K.
Juhuasuan says it works with duty-free zones in six Chinese cities to allow imported products to move into China quickly after consumers place orders. There are free trade zones in 10 Chinese cities where products ordered online from foreign companies can be quickly processed through customs and then turned over to transportation companies for delivery to Chinese consumers.