China’s top online store, Tmall, is trying out a special promotion that will see American foods sold directly by US firms to Chinese consumers. This is running through to January 15th, allowing shoppers on Alibaba’s Tmall to buy products like Alaskan flounder fish or fresh salmon, Hawaiian macadamia nuts, and Pepperidge Farm cookies.
The promotion is on the pre-orders section of the Tmall site, where folks in China can put down a deposit now on items – that’s the price seen in red text in the image below. Full payment comes upon final delivery, which is expected to be on the last day of this month – just in time for Chinese New Year on February 10th.
The pre-order system means that the US foodstuffs companies know precisely how much to ship, and customers in China will see prices dip if more people order certain items. For example, the fresh salmon was originally tagged at 368 RMB (US$58) for a kilo, but is now down to 248 RMB ($39) with nearly 700 people having ordered the item already.
Alibaba’s in-house blog notes today that this scheme features input from the US Department of Agriculture’s branch in Shanghai. In a statement, Tmall’s senior director, Ma Xuejun, added:
[This] addresses Chinese consumers’ changing lifestyle needs and will enable merchants and suppliers to more accurately estimate consumer demand, thereby optimizing the supply chain and returning cost savings to both parties.
This tie-up with US food-makers is an example of the C2B (consumer-to-business) model that Alibaba, as an e-commerce platform that doesn’t buy or store its own inventory, is keen to promote. It’s a bit similar to the JIT (just-in-time) manufacturing process that’s a growing trend in online fashion retailing. A few months ago we heard Professor Zeng Ming, Alibaba’s chief strategy officer, say that “e-commerce is not just online sales, but transforming business in every aspect, step by step,” and part of that is by now allowing companies to sell in this kind of flexible and customizable way.
Tmall’s move comes at a time of ongoing concern about food safety in China amidst seemingly never-ending scandals about locally-produced foods and drinks.
Source: Tech in Asia Jan 2013