Nestle and Alibaba announced plans Sunday [5 June 2016] to upgrade their partnership. The world’s largest food retailer will launch its biggest e-commerce campaign ever with its diverse products, spanning 30 brands from coffee to baby formula, being sold on Alibaba’s expansive e-commerce platforms such as Tmall…Full Article: ECNS.cn June 2016

Key Points

  • From January 2011 to April 2016, according to a report by Alibaba and a private research institute, Chinese online purchases increased 12-fold (by volume).
  • In 2015, online sales comprised 50% of Nestlé’s sales in China.

ChinaAg Comments

  • In September 2015, Germany’s Metro Group AG (hypermarkets) announced it would open an online store on Alibaba’s Tmall. During the same month, Alibaba announced it would market Californian Mondavi wines, including middle shelf wines (US$15 to US$20 per bottle) Twin Oaks and Woodbridge, via its Tmall Vineyard Direct web platform.
  • In March 2015, Nestle China destroyed tons of instant coffee in its Dongguan, Guangdong province, factory due to poor demand.
  • During the 2014 to 2015 coffee season, Nestle reportedly purchased 10,000 MTs of coffee beans from the Pu’er region or Yunnan.
  • In December 2014, Nestle opened its first “coffee center” (e.g. training center, quality control, etc.) in Yunnan. Nestle stated they would only procure coffee beans in Yunnan that are “4C” certified.
  • In 2013, Alibaba, the Hangzhou-based e-commerce business, stated that sales for its agricultural goods grew by 195% year-on-year. Its best performers in this category were fruit, vegetables, and seafood.
  • In January 2013, Tmall, a business to consumer e-commerce website that is operated by Alibaba, ran special promotion that sold American foods directly from US firms to Chinese consumers
  • In 2011, Nestle acquired a 60% stake in China’s Yinlu Foods Group (ready-to-drink Nescafé coffee).
  • In 1997 Nestle began acquiring Chinese companies and has since acquired eight (i.e. Hsu Fu Chi, Yinlu, and more).

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