Alibaba inks exclusive deal with Macy’s department store to bring US products to China's online shoppers
Chinese e-commerce powerhouse Alibaba has signed on American department chain Macy’s to set up an exclusive flagship store on its global e-commerce platform online.
This will allow Chinese consumers to buy goods directly from the US as Alibaba continues to expand its cross-border e-commerce operations.
Like an increasing number of major department stores around the world, including Harrods in London, Macy's is already active on leading Chinese social media sites like Tencent's WeChat, the country's most popular messaging service, and microblogging site Weibo, dubbed "China's Twitter".
Now its interests have dovetailed with those of Alibaba, which has been looking to bolster its revenue streams as growth in its domestic market begins to wane.
Hong Kong-headquartered Fung Retailing will form a new joint venture with Macy's. Under the new joint venture, Macy's can sell goods directly through Alibaba's e-commerce platform Tmall Global to Chinese online shoppers, according to a statement issued by Fung Retailing. LF Logistics, an afffiliate of Fung Retailing, will also provide logistics support to Macy's for sales through Alibaba's Tmall Global.
This week, the Chinese internet behemoth announced a US$4 billion share buy-back plan to support its stock price amid uncertainty in the Chinese economy and its own disappointing earnings results.
Lead founder Jack Ma Yun visited the US in June, urging businesses there to make use of Alibaba's platforms to sell their products to China's emerging middle class.
READ MORE: Alibaba hires ex-Goldman Sachs, Olympic gold medallist to lead expansion in United States
As Ma seeks to internationalise his operations, more big-name sports brands like German football team Bayern Munich are also jumping on board.
Spanish powerhouse Real Madrid agreed to set up an online store on Alibaba’s Tmall last month.
And NBA icon Kobe Bryant recently inked a wide-ranging agreement with Alibaba that saw one of its subsidiaries release Bryant's self-produced video documentary. Another is set to create Kobe-branded products for sale on its retail platforms, which offer access to over 350 million active buyers in China.
But Macy’s is the first US department store to ink a deal with Alibaba, and Chinese consumers can expect to purchase clothing, accessories and lifestyle products from the retailer’s online store on Tmall Global, according to a statement by Alibaba.
The e-commerce juggernaut continues to woo overseas retailers and international brands to list their wares on Tmall Global, Alibaba’s cross border e-commerce site. Last week, Alibaba also landed exclusive partnerships with apparel brands Zara and Timberland.
Alibaba is also reportedly in talks with Hong Kong apparel company Global Brands Group, which carries licenses for brands including Calvin Klein, Quiksilver and Disney.
The deal with Macy’s comes as Alibaba posted its slowest growth in three years in its second quarter earnings, missing analysts’ forecasts by reporting year-on-year growth of 28 per cent.
Alibaba’s shares fell 8 per cent to a record low of US$71.03 following its disappointing earnings results.
Rival JD.com is also aggressively moving into cross-border e-commerce with its platform JD Worldwide.
JD Worldwide currently boasts five international malls, namely Australia, France, Japan, South Korea and the US.
The company also announced in July that it would sell an exclusive clothing line by pop star Taylor Swift.
China’s cross-border e-commerce market will reach US$245 billion in 2020, driving the growth of the global market, which is estimated to hit US$1 trillion that year, according to a research report by Accenture and Alibaba in June.