Costco to set up online store on Alibaba platform
US retail giant making entry into Chinese market to tap the huge demand for foreign products
Fresh from its stock listing in the United States, Alibaba Group Holding chairman Jack Ma Yun has started to bring a new wave of merchants to China through its online trading platform.
It will be the first presence in China for the second-largest US retailer.
Nasdaq-listed Costco reported sales of more than US$110 billion for the year to August.
The American company was tapping into China's vast retail market through the online store without the need for physical operations there, reducing business risk to "nearly zero", said Liu Xingliang, the chairman of Hongmai Software, a Beijing-based internet data analysis company.
Liu said food and health-care products were a good fit because food safety was a big concern in China and consumers had more confidence in foreign brands.
He said the move was also good news for Chinese consumers. "Chinese people always ask friends to buy them clothes and milk powder from abroad because there is no easy channel to access foreign brands," he said.