Target begins selling online in China
September 15, 2016 06:00 AM
Target Corp., which does not operate physical stores in China, has started to sell to Chinese consumers via the web.
Target, No. 22 in the Internet Retailer 2016 Top 500, launched a storefront this week on Tmall Global, the online shopping mall for overseas brands operated by China’s dominant e-commerce company, Alibaba Group Holding Ltd.
Target is selling products “in the baby, health and grocery categories—areas that we believe reflect the interests of Chinese shoppers,” a Target spokesman says. “The partnership enables Target to continue to learn about the international market, how Chinese guests shop and what types of products resonate most.”
Many Chinese consumers prefer to go online to buy directly from overseas companies because that gives them confidence they’re getting authentic, quality goods, according to a recent report from consulting firm McKinsey & Co. McKinsey cites a 2014 study by Chinese market research firm iResearch, which shows that 68% of Chinese consumers said they bought online from foreign sellers because of product quality and 66% because of price. McKinsey estimates Chinese online shoppers purchased $40 billion through cross-border e-commerce in 2015.
China in recent years has relaxed rules on consumers buying imported products online, making it easier for China’s middle class to access the foreign goods they want. The government has created special cross-border e-commerce rules that allow individuals to make small purchases that carry customs duties lower than those on bulk imports. Several Chinese cities now have special port facilities dedicated to cross-border e-commerce where overseas retailers can stage products, then send them through an expedited customs-clearance process when a Chinese consumer places an order.
Foreign companies also can take advantage of these special e-commerce rules when fulfilling orders from abroad, and that appears to be what Target plans to do, at least initially. “Our products will ship from the U.S. directly to Chinese consumers, which normally takes about 12 days for shipping,” a Chinese customer service representative for Target tells Internet Retailer.
Alibaba says more than 6,000 overseas retailers and brands sell on Tmall Global, which Alibaba launched in 2014. They include U.S. retailers Macy’s Inc. and Costco Wholesale Corp., and the U.K.’s House of Fraser and Sainsbury’s. Macy’s is No. 6 in the Top 500, which ranks North American retailers by their online sales, and Costco No. 8; Sainsbury’s is No. 21 in the Internet Retailer 2016 Europe 500 and House of Fraser No. 74.
For more information about the Chinese market, please click here for the Internet Retailer 2016 China 500.