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04/16/2015

Can international expansion really be this easy?

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Physical expansion remains the primary growth driver of many a U.S. retailer, but the likes of Alibaba and rival JD.com are allowing U.S. retailers and brands to tap the Chinese market without the aggravation and financial uncertainty associated with establishing a physical presence.


Cross border trade facilitated by the Internet and powerful technologies that minimize the complexity of international commerce is a huge trend in the retail industry. Alibaba launched its Tmall Global in Feb. 2014 as a means to help U.S. retailers sell in China and now JD.com has a similar offer which could have some U.S. retailers rethinking their domestic capital expenditure budgets.


“Chinese consumers are looking for Western goods of high quality,” Alibaba Group’s Sherri Wu, head of international e-commerce business development for the Americas, told attendees recently at ChannelAdvisor’s Catalyst conference. At present, 5,400 brands from 25 countries are accessing Chinese consumers via Alibaba’s Tmall Global. Orders are fulfilled from three bonded warehouses in China and transactions are executed using Alibaba’s Alipay platform, according to Wu.


More recently, JD.com, a company more akin to Amazon.com that has built an expansive distribution system throughout China, has launch JD Worldwide, its answer to Alibaba’s Tmall Global. JD.com said its new cross-border e-commerce platform provides Chinese consumers with the most convenient way to purchase authentic imported products, including many not previously available in China, and enables international producers and suppliers to sell directly to Chinese consumers without requiring an established presence in China.


“This new cross-border sales platform marks a major step forward in connecting Chinese consumers with international brands,” said Richard Liu, JD.com founder and CEO. “By combining the advantages of China’s cross-border free trade zones, JD’s warehouses and unparalleled last-mile logistics network, and our experience developing winning marketing campaigns for our partners, JD Worldwide gives international sellers and brands the most comprehensive and effective solution available for reaching Chinese consumers.


JD Worldwide currently features both direct sales and marketplace channels and hosts about 450 online shops, which offer over 150,000 imported products from 1,200 brands. Orders are fulfilled through a supply chain that includes seven fulfillment centers, 123 warehouses in 40 cities and 3,210 delivery and pick up stations in 1,862 counties and districts across China. Along with the JD Worldwide launch, the company today also announced a pilot program called “Best of eBay Deals,” on a new platform in partnership with eBay.


Responding to growing demand from Chinese consumers seeking items from eBay’s global inventory, eBay’s channel on JD Worldwide will showcase a variety of top categories and popular brands at attractive prices from select, trusted eBay sellers from the U.S., according to the company.