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Kroger Going Global With Alibaba Partnership

Retailer to sell groceries in China for the first time
Photograph courtesy of Alibaba

The Kroger Co. is readying an online sales portal that will bring its products to consumers in China for the first time.

The Cincinnati-based grocer is set to open a shop this week on Alibaba.com’s Tmall Global site, which features foreign products. 

The launch confirms speculation first raised earlier this year of discussions between Kroger and the Chinese e-commerce giant about a developing “commercial partnership” between the retailers. The deal will allow Kroger to get a foothold in global sales for the first time in its 135-year history and keep pace with rivals such as Walmart, which has also announced various partnerships to expand into Asia this year including a strategic investment in the Indian e-commerce operator Flipkart.

“E-commerce enables Kroger to quickly scale to reach new customers and markets where we don’t operate physical stores, starting with China," Yael Cosset, Kroger’s chief digital officer, said in a statement. “We anticipate Chinese consumers will love our brands – starting with Simple Truth products – just like our American customers do. Kroger is proud to continue to lead the way in making natural, organic and free-from products more mainstream and accessible. Sharing Kroger's exclusive brands and status as a food authority the world over is exciting.”

Financial details of the Kroger-Alibaba deal were not disclosed.

Kroger said the company would launch the offer with a mix of dietary supplements and its private-label Simple Truth products that it sells online in the U.S. through Vitacost.com and through its online stores for pickup or delivery, where available. Kroger more recently expanded its U.S. e-commerce efforts to offer home delivery for a variety of dry groceries and household items in a new offering called Kroger Ship. As WGB previously reported, that offering is using the same fulfillment centers Kroger is using for Vitacost.

The deal is the latest in a string of announcements – many of them partnerships – supporting Kroger’s $900 million Restock initiative announced last year. Kroger said the move will support the strategies objectives to “redefine the grocery experience” through its own brands, and to open new revenue streams through strategic partnerships.

Launched in 2014, Alibaba's Tmall Global platform is China’s largest business-to-consumer marketplace, providing a premium shopping experience for China’s consumers, Kroger said. The platform provides brands and retailers without operations in China to build virtual storefronts and ship products into China.

Simple Truth has quickly become the second-largest brand sold in Kroger stores since launching five years ago. In 2018, Simple Truth reached more than $2 billion in annual sales, making it the largest natural and organic brand in America.

 

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