Woolworths is going direct to China to sell its home brands

Photo: ChinaFotoPress via Getty Images

Woolworths has set up as an online retailer in China after noticing its products are being sold there online.

eCargo, a China-based e-commerce solution provider for fashion brands, will be supporting Woolworths’ toe in the water in China via the online site Tmall.

“Woolworths has established a store on the site to sell a small, selected range directly to Chinese consumers,” a spokesman said.

“While we have no significant plans for Tmall at this stage we will no doubt benefit from the experience it brings.”

Baby formula bought at Woolworths ends up being sold online in China at a big markup. There’s big demand for “clean” goods from Australia, including vitamins. It’s understood Woolworths will first be selling its own home brands.

eCargo will build and manage Woolworths’ storefront on Tmall, the largest B2C online marketplace in China. It will also coordinate Woolworths’ inventory, packing and distribution requirements, advise on brand entry strategy and undertake a wide-range of digital and social marketing activities.

China’s total retail e-commerce sales would increase 133% to $US1.568 trillion in 2018, up from an estimated $US672 billion this year, according to eMarketer.

Woolworths has been struggling, reporting flat sales as it deals with a more competitive market in Australia. In the first quarter, sales rose just 0.4% to $11.064 billion for food and liquor. Woolworths expects profit to fall to between $900 million to $1 billion in the first half of 2016, a 28% to 35% drop when compared to the same six months last year.

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