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How does Sainsbury’s fulfil its Alibaba Tmall orders in China?


Sainsbury’s had big plans to generate sales growth in China this week thanks to its involvement in 8.8, Alibaba Tmall’s shopping event for international brands. It’s thought to be one of Tmall Global’s busiest traffic days of the year.
So on Monday (8th August 2016), Alibaba’s cross-border shopping site held its annual 8.8 Shopping Festival, showcasing top-selling products from around the world during a live-streamed event on the Tmall mobile app. Through a series of real-time broadcasts, Sainsbury’s as well as other brands including US sports nutrition company GNC, and Korean cosmetics maker Too Cool for School used everything from dance routines to makeovers to connect with consumers watching from home (see video below).

It’s expected that Sainsbury’s will have seen a big spike in orders. Fulfiling them over such a distance is bound to be a challenge so we asked Sainsbury’s how it goes about doing so. Here’s the delivery strategy in a nutshell:

How does Sainsbury’s fulfil orders on Tmall?

  • Most of the stock is sent by sea freight to Sainsbury’s bonded warehouse in Ningbo.
  • When a customer places an order on Tmall the stock is picked from the warehouse and delivered by a third party partner Cainiao to the customer within 2-3 days.
  • Sainsbury’s offers customers free delivery on orders over 169 RMB (about £19), and also for all major promotions, so the majority of customers do not have to pay for delivery.

Tmall-logo_2What’s so special about Alibaba Tmall?

Alibaba is the largest e-commerce operation in China, a market which is dominated by promotional sales events. Cracking this massive market is the dream of most European retailers and Sainsbury’s could be in pole position to generate sales and win new customers thanks to getting in on the act so early.

Tmall Global currently hosts 7,700 brands from 53 countries and regions on its platform, with 2,300 joining so far this year alone. It’s very difficult for Chinese consumers to find and know them all. Tmall Global is bringing the US, Europe and Japan, Australia, New Zealand, Hong Kong, Korea and Thailand to China.

What was 8.8 all about?

Having gone live on Alibaba’s Tmall Global in September last year, Sainsbury’s has been able to cash in on a high profile shopping festival this week. The UK grocer is the only international grocer to have a ‘Super Brand Day’ on Tmall during this year’s 8.8 Tmall Global Shopping Festival on 8 August. Other UK retailers, including The Cambridge Satchel Company and Whittard were showcasing new products and deals to the masses of shoppers on Tmall.

8.8 is a 24-hour shopping extravaganza that Alibaba created last year to promote its international offering. Held on the eighth day of the eighth month – an important date in China where people consider eight a lucky number – it is an occasion on which international brands launch exclusive products and eye-grabbing deals on Tmall. Chinese online shoppers use the event as an opportunity to look for novel brands and products from overseas.

Before 8.8, Alibaba hosted ‘Singles’ Day’, an anti-Valentine’s Day celebration on November 11, dedicated to celebrating one’s single status. For 2015 the etailer reportedly processed £9.4bn of orders on that day.

What can Sainsbury’s offer Chinese customers?

Sainsbury’s now offers more than 100 self-branded ambient products across four categories – British breakfast, drinks, organic and baby – tapping into a thirst among the newly emerging Chinese middle class for organic food, and high quality British produce, particularly the Taste the Difference range. The supermarket chain said that British breakfast and afternoon teas were among its best sellers so far, and that more product lines would be added in the autumn.

AlibabaJohn Rogers, Chief Financial Officer at Sainsbury’s, believes Chinese online shoppers are increasingly interested in high quality international products. “Many customers also want to replicate tastes and occasions that they have enjoyed or heard about through international travel. Products to make a British breakfast and English afternoon tea have therefore proved hits and top-selling lines to date include Sainsbury’s Taste the Difference Granola with raisins, honey and nuts, tea, shortbread and UHT milk.”

He said the trial with Tmall has enabled Sainsbury’s to learn a lot about China’s huge digital market, including the importance of sales events such as Singles’ Day and 8.8, and how to go about fulfilling orders in line with Chinese customers’ expectations. “Alibaba’s expertise in the rapidly growing Chinese digital consumer market will be a huge asset to us as we grow and develop our business in China and we look forward to working with them on this exciting opportunity,” he said.

What are the challenges for UK retailers aiming to win fans in China?

While emerging Chinese demands and an interest in English heritage puts Sainsbury’s in a very good strategic position thanks to its involvement with Tmall, it has undoubtedly been tough for Sainsbury’s to stand out in this enormous, busy market. Experts on the Chinese ecommerce market say that to stand out you need great product, clear eye-catching online merchandising, clever use of data, and to be top notch at spreading the world via social media. Alibaba also uses the shopping data it collects from users to reach Sainsbury’s intended audience and drive engagement with those customers. Will this have been enough to successfully showcase the Sainsbury’s brand and drive traffic to its Tmall store front? We wait with interest to hear.

Read more about Tmall Global and retail in China here.

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