Aldi will sell Australian products in Chinese stores from next year

Photo: DANIEL LEAL-OLIVAS/AFP/Getty Images

German discount supermarket Aldi is set to enter China, and broader Asia, using Australia as a springboard.

Aldi plans to sell groceries and wine online to China, the world’s most populous nation, in the first half of next year. It is also expected to build physical stores there.

A mushrooming of Aldi stores across Australia has other Aussie supermarkets looking over their shoulders.

The site will sell “non-chilled” groceries and wine, and the “majority of these products will be sourced from Aldi’s existing Australian suppliers,” a company spokeswoman said.

She did not answer when asked how many Australian suppliers would be supplying the Chinese site.

Lebensmittel Zeitung’s German retail blog downplays the likely contribution from Australian suppliers. It reports “experts close to the company” saying Aldi “intends to create a truly local assortment with products ‘made in Germany’ as a topping”.

‚ÄčThe spokeswoman said, “We know there is a strong demand among Chinese consumers for Australian manufactured products and our goal is to provide a competitively priced alternative for shoppers seeking quality groceries.

“Aldi has been active in the China market for several years undertaking detailed feasibility studies regarding potential market entry options. This work has resulted in the decision to commence retail operations in the China market, initially with an e-commerce retail offering.

“In the second quarter [of] 2017, Aldi will commence selling a carefully selected range of everyday grocery items to Chinese consumers via an online retailing platform with products delivered to consumers’ homes.”

Now operating in Europe, Britain, the US and Australia, Aldi has foreshadowed further launches in Asia.

“We look forward to further expanding these relationships [with Australian suppliers] as we develop further opportunities in Asia,” the spokeswoman said.

The secretive chain did not answer questions on how and why Aldi Australia was involved in the China business.

It is speculated Aldi is using its Australian arm because it wants to use Australian management and to avoid the complications some Western companies have experienced in China. It is also speculated Aldi will seek to hire from Australia’s Chinese community for the business.

In the second quarter [of] 2017, Aldi will commence selling a carefully selected range of everyday grocery items to Chinese consumers.

– Aldi spokeswoman

Aldi has flagged 11 per cent growth in Australian sales this year to $7 billion. It came under attack recently from entrepreneur Dick Smith, who described the privately held company as one of the world’s “most ruthless” retailers, with “unlimited” greed.

“They are here to eventually take hundreds of millions of dollars out of our country and repatriate this money to Germany,” Mr Smith said.

Aldi Australia responded that 90 per cent of its everyday grocery range was private label, with most of these products sourced from local manufacturers.

“All profits continue to be reinvested in our Australian operations, with the focus of these investments being directed towards store refurbishments and extensions, new store openings and produce buying centralisation,” it said.

This article first appeared on Business Day. Read the original article here.

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