Kroger to Partner with China

Kroger Co. will sell its products in China on an e-commerce site owned by Alibaba Group Holding Ltd., the grocer’s first foray into foreign sales amid a broader push into online retail.

The U.S. supermarket chain on Tuesday said it plans to open an online storefront on Alibaba’s Tmall Global site, the Chinese internet titan’s platform for international brands. Kroger said the site will launch Wednesday with an initial product offering that includes dietary supplements and private-label products, much of it natural and organic goods.

“Growing into the Chinese market is a huge opportunity for Kroger and we are really excited,” said Yael Cosset, Kroger’s chief digital officer, in an interview. An Alibaba spokeswoman said the company was “pleased to work with Kroger” on bring its products to the Chinese market, particularly the grocer’s Simple Truth line of natural and organic goods. Kroger stock spiked 2.8% after The Wall Street Journal reported about the partnership.

“E-commerce enables Kroger to quickly scale (up) to reach new customers and markets where we don’t operate physical stores, starting with China,” Yael Cosset, Kroger’s chief digital officer, said in a statement. The latest move from the 135-year-old grocer comes as the $800 billion U.S. grocery industry wrestles Amazon.com Inc’s aggressive expansion into groceries through its purchase of specialty retailer Whole Foods Market and other efforts.

Kroger responded with its biggest strategy shift in two decades and already has unveiled a series of online initiatives. Those include inking an exclusive U.S. deal with British online grocer Ocado to build automated warehouses to prepare curbside pickup and delivery orders and launching a beefed-up U.S. online shopping service called Kroger Ship that sends packages directly from its distribution centers.

Kroger said its Simple Truth natural and organic products, which generated $2 billion in sales last year, will be sold in China beginning on Wednesday. Initial offerings include almonds and multivitamins.

 

Todd “Bubba” Horwitz