The Alibaba Group and Unilever China announced their goals for a comprehensive strategic partnership earlier this week. There is much excitement and optimism surrounding this pairing. The growth potential for Unilever’s fast moving consumer goods (FMCG) by way of Internet portals powered by the Alibaba Group will surely strengthen their e-commerce landscape in China.
In May 2015, Daniel Zhang became the Chief Executive Officer of Alibaba Group. Zhang joined the company in 2007 and has held several senior management positions.
In an interview with CNBC on May 7, 2015, Zhang stated, “From our platform we can observe that the consumer demand is huge and today the new trend is that people like high quality foreign products from other countries, so that’s why we started our cross-border initiative one year ago, and we will help the suppliers all over the world to sell their products through our platform to Chinese consumers.”
During the interview, he further confirmed that consumption is strong in China, especially in mobile commerce. Zhang has been described as the key architect of the Singles Day event on November 11, 2014, which produced record sales of more than $9 billion.
Zhang has a proven track record of anticipating winning moves in e-commerce. “Unilever Week” is scheduled to kick-off during July 22-24, 2015 on Tmall.com to celebrate the start of the partnership where consumers will be able to access variety of high-quality selection of products. Tmall.com (www.tmall.com) is China's largest third-party platform for brands and retailers.
This agreement is a major milestone for a partnership that started five years ago with a single Tmall store which has since grown steadily on a solid foundation of mutual trust and success over the years. Through this strategic partnership, Alibaba Group and Unilever China will work together to:
- Strengthen cooperation to expand distribution channels, especially for consumers in rural areas to enjoy more convenient access to Unilever products.
- Further develop cross-border e-commerce cooperation and make the Tmall Global Unilever store home to the richest selection of Unilever products from around the world.
- Expand application of Big Data to optimize Unilever’s digital advertising strategy through Alimama, Alibaba’s online marketing business, and reach more consumers through online-offline retail integration.
- Deepen collaboration in Alibaba’s Blue Star program where each product is tagged with a unique QR code that allows the consumer to verify its authenticity and origin. This will help protect Unilever’s brand and combat counterfeit goods to protect the customer user experience.
- Develop innovations in supply chain management and offline distribution models.
Unilever China: Full Press Release
While the announcement of the partnership has created recent buzz, this isn’t the first collaboration with one of China’s major online companies. This June, Unilever launched a flagship store on JD Worldwide. JD.com, Inc., China’s largest online direct sales company. JD.com revealed in a press release:
"JD.com is a long-time partner and our fastest growing e-commerce sales channel in China, so we're excited that this partnership with JD Worldwide will extend our offering to include many of the best-known products in our global portfolio," said Andy Li, Director of Unilever's China E-commerce Business. "Unilever has more than 400 brands globally, many of which are not yet available in the Chinese market. By partnering with JD Worldwide, we can quickly and efficiently address growing demand from Chinese consumers for many of our most successful products in the US, European and Asian markets."
Unilever’s partnerships with such companies are aggressive moves towards further expansion in emerging markets. Unilever released the company’s first quarter results and emerging markets were up 5.4%. The Q2 and half year results will be announced later this week, the webcast will be hosted by CEO Paul Polman and CFO Jean-Marc Huet followed by a Q&A session at 7 am (UK time), the general public can listen to it live.
Comfort, Dove, Knorr, Lipton, LUX, LYNX, OMO, POND’S, Rexona, Unilever Food Solutions, Vaseline, Cif, CLEAR, Hazeline, Pureit and Zhonghua, are 15 brands currently available in China. From investments in distribution and the attention to detail in product packaging and marketing, Unilever has left no stone unturned. pacproject, a design company, states their involvement with one of Unilever’s Lynx product geared for the market in China on their public portfolio.
“Unilever’s Lynx shower gel launch in China
On-site support for the packaging development team of a customer in China to launch a shower gel series together with the introduction of personal care brand “Lynx.” The primary pack bottle has a global shape in two sizes which has been technically adapted to the production needs in China. New molds have been qualified and new label artworks technically developed in cooperation with local suppliers. Print trials & line trials have been organized and supported on site. Furthermore, new secondary packaging has been developed and tested in transit trials. Finally, specifications and bill of materials have been set up.”
Both The Alibaba Group and Unilever have a vested interest in the success of the partnership. Increasing consumer access to high-quality products in China will not only yield more profit in e-commerce, but the big data analytics will also help both companies to improve the customer experience across the board.
About Alibaba Group
Alibaba Group's mission is to make it easy to do business anywhere. They operate leading online and mobile marketplaces in retail and wholesale trade as well as cloud computing and other services. They provide technology and services to enable consumers, merchants and other participants to conduct commerce in their ecosystem. To learn more about the Alibaba Group, click here.
Tmall.com is an open business-to-consumer (B2C) platform enabling businesses worldwide to reach China’s vast and growing consumer market. Tmall.com has established itself as the destination for quality, brand-name goods catering to increasingly sophisticated Chinese consumers and is the most visited B2C online retail website in China. To learn more about Tmall.com, click here.
Unilever PLC operates in the fast-moving consumer goods market in the Americas, Europe, Asia, Australasia, Africa, the Middle East, Turkey, the Russian Federation, Ukraine and Belarus. The company operates through personal care, foods, refreshment, and home care segments. To learn more about Unilever, click here.