Costco partners with Alibaba to sell in China

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By Jacqueline Renfrow

Costco (NASDAQ:COSTCO) is entering the Chinese market for the first time through a partnership with e-commerce giant Alibaba. The Washington-based warehouse company has opened a store on T-Mall, an online marketplace run by Alibaba.

The store will sell the usual Costco products including baby goods, beauty items, dietary supplements and household products, reported Forbes. All orders will mail directly from the United States to consumers’ doorsteps over the course of five to 20 days.

T-mall offers virtual store fronts and payment portals to merchants and the warehouses abroad would help cut logistics costs and delivery time, reported Reuters.

One reason Costco chose to enter the market is China’s new desire for imported and quality food. In a time of food safety issues, the country is looking to the United States because of its healthier track record.

“Costco sees tremendous growth opportunities in China, especially in light of Chinese consumers’ increasing appetite for imported products,” Jim Murphy, Costco’s executive VP, said in a statement.

Costco’s competition will include Yhd.com, the online supermarket half owned by Walmart, and Sam’s Club plans to expand on the 10 brick-and-mortar stores it already has in China. The company also owns 19 stores in Japan and 10 each in Taiwan and Korea through majority-owned subsidiaries, reported Reuters.

The announcement came on after the company reported a net income of $697 million in the latest quarter, up from $617 million last year.

Costco joins the growing list of retailers who have signed on this year to partner with Alibaba’s T-Mall including Zara’s parent company Inditex, which a few weeks ago turned over partial control of its e-commerce site to Alibaba.

Alibaba’s presence in the United States is growing, as the company went public in the U.S. market last month at a record $68 a share.

For more:
-See this Forbes article
-See this Reuters article

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Read more about: Costco, Walmart

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