China’s growing middle class craves Western goods, and another of China’s biggest e-commerce companies moved today to satisfy that craving.
JD.com Inc., the second-largest e-retailer company in China after Alibaba Group, announced the launch of its U.S. Mall on its cross-border e-commerce platform, JD Worldwide, which will offer imported U.S. products to online shoppers in China.
Among the brands JD.com will offer include Converse, Samsonite, Ocean Spray and such Global Brands Group apparel labels as Nautica Kids and Jeep. “Online shopping has become an increasingly
important trend in the Chinese market,” Bruce Rockowitz, CEO and vice chairman of Global Brands
Group Holding Ltd., said in a statement. “Through our strategic partnership with JD.com, we look forward to making even more leading American brands available through this innovative platform.
In addition, JD.com says it will sell a line of clothing designed by pop star Taylor Swift exclusively for JD.com and only available for sale in China. “JD.com is delighted to become the sole online source of authentic, high-quality Taylor Swift merchandise,” Richard Liu, JD.com founder and CEO, said in a statement. “She is an enormously popular artist and true global cultural icon who is winning over thousands of new fans in China each day.
The Taylor Swift products are created by Heritage66 Company, a firm based in Nashville, Tenn., which helps U.S. performers expand their reach in China. “JD.com is simply the one and only e-commerce site where shoppers in China can be assured they will get only authentic Taylor Swift products that meet the high quality standards her fans deserve,” says Mark McDonald, chairman of Heritage66. The Taylor Swift dresses, tops and sweatshirts will go on sales next month in China, JD.com says.
JD.com is No. 1 in the Internet Retailer 2015 China 500 with 2014 online sales of $41.9 billion, an increase of over 107% from the prior year, according to Top500Guide.com. Alibaba reported $394 billion in sales on its online marketplaces for its most recent fiscal year ended March 31. But Alibaba is not ranked in the Top 500, because, like eBay.com, it host stores for other online merchants but is not the merchant of record for sales made on its big Taobao and Tmall marketplaces.
The U.S. mall is the fifth country-specific channel JD.com has launched this year to bring imported goods to Chinese shoppers. The others feature products from Australia, France, Japan and Korea. More will follow based on demand from Chinese consumers, JD.com says.
Meanwhile, Alibaba’s Tmall marketplace has launched shopping portals dedicated to imported products from 11 countries, including the United States. The U.S. portal on Tmall features such brands as Nike, Tommy Hilfiger and Costco Wholesale Corp.’s line of Kirkland grocery products.
Alibaba announced today an agreement with Unilever, the British-Dutch conglomerate whose brands include Dove soap, Lipton tea and Hellmann’s maynonnaise, to step up marketing of Unilever products to online shoppers, particularly in rural areas of China. “Alibaba is the leading internet company in China, with the most innovative thinking,” said Marijn Van Tiggelen, Unilever North Asia President, in announcing the deal. “It’s not only an online store, but also a solution platform for online payment, e-finance, and e-commerce logistics. In cooperation with Alibaba, Unilever can provide more convenient services to consumers in China.”
Amazon.com Inc.’s China e-commerce site, Amazon.cn, also is focusing on bringing in imported products, and reported late last year that it increased by 30% in 2014 the number of international brands selling on its China site. Among the U.S. brands selling on Amazon.cn are apparel labels Joe’s and Miz Mooz and audio products maker Bose.
All these companies are seeking to meet the demand for increasingly affluent Chinese middle-income consumers, many of whom are leery of the quality of Chinese goods and seek out products made abroad. By 2020, Chinese consumers will be buying $245 billion worth of imported products online, and 200 million Chinese shoppers will be making cross-border online purchases, predicted a recent report from U.S. consulting firm Accenture and AliResearch, an arm of Alibaba Group.
JD.com is trying to stand out by guaranteeing that it will sell only authentic U.S. goods and by making it easy for U.S. brands to ship goods into China and arrange delivery to Chinese consumers.
Liu emphasized his company’s efforts to prevent the sale of counterfeit or unauthorized goods on JD.com. “As American companies increasingly understand our core advantages of zero tolerance towards counterfeits and unparalleled same-day delivery capabilities, we are gaining excellent momentum attracting U.S. brands to our site,” he said at the launch of the U.S. portal.
The reference to counterfeit goods could be seen as a swipe at Alibaba, which has frequently been accused of tolerating the sale of fake goods on its marketplaces. On Friday, the American Apparel & Footwear Association, a trade group of U.S. apparel brands and retailers, released an open letter to Alibaba Group executive chairman Jack Ma complaining that Alibaba is still not doing enough to stop the sale of knock-offs, despite years of discussions on the topic.
“We reiterate our dedication to fight against counterfeits because the health and integrity of our marketplaces depend on consumer trust,” an Alibaba spokesman said in response. “We work closely with our government partners, brands and widened our coalition with industry associations to tackle this issue at its source. Our track record of fighting illicit activities is clear and like all global companies in our industry, we must continue to do everything we can to stop these activities.”
To help fight counterfeiting, Alibaba has launched a campaign it calls Blue Stars encouraging brands to add QR codes to their products that attest to authenticity. The program makes use of technology from an Israeli company, Visualeads, in which Alibaba has invested, that lets brands add colorful elements including logos to make the QR codes more distinctive and harder to imitate. In its announcement today, Unilever said it would step up its use of QR codes to prevent counterfeiting. Other Western brands participating in Alibaba’s Blue Stars program include L’Oreal and chocolate maker Ferrero Rocher.
JD.com also announced an agreement with logistics company DHL Global Forwarding to help U.S. brands bring goods into China and arrange delivery throughout the country. “With increasing demand for ‘Made in America’ products, Chinese consumers are buying American products from JD.com at an exponential rate, with exports from the U.S. into China in 2014 totaling over $123 billion,” Alfred Goh, senior vice president and global head, Fast Growing Enterprises, DHL Customer Solutions and Innovation, said in a statement. “All consumers globally expect their orders to arrive promptly and our extensive network and reliability will help JD.com extend quality service to its customers.”