Sigma Pharmaceuticals Ltd., an Australian pharmacy giant, has expanded into e-commerce China by first launching a Chinese language site for its subsidiary Amcal, a major drugstore chain in Australia.

Amcal will sell on its own e-commerce site, cn.amcal.com.au, and not on major online marketplaces, which frequently are an entry point for foreign retailers and brands selling directly to Chinese online shoppers.

Major categories on the site include cosmetics, nutritional supplements and baby and maternal products. The site accept two Chinese local payment options: cards from China’s banking card network China UnionPay and the popular Alipay online payment associated with Alibaba Group Holding Ltd., China’s leading e-commerce company

The retailer will ship orders from Australia to China, rather than holding inventory in China, and it will take about 15 days for Chinese consumers to receive their orders. Sigma is one of the largest pharmacy retailers, managing more than 1,000 stores in Australia.

“Sigma recognized the rapid growth in e-commerce in China, but also the demand for quality Australian pharmacy branded products, including vitamins and beauty accessories.” a company spokesman tells Internet Retailer. “It is an important milestone for Amcal, as this will be the first international launch of the brand, starting with China. Sigma want’s to ensure the Amcal brand builds up the same recognition it has in the Australian market and will focus heavily on this going forward.”

Sales of Australian products in China have been growing in the past year since China and Australia signed a free trade agreement that will reduce tariffs on most products traded between the two countries to zero within five years. 

The pharmacy company has no immediate plans to open physical stores in China. Sigma says selling online to consumers outside of Australia can reduce its reliance on its core business of distributing medicine to pharmacy outlets. 

“With this move into China there is an opportunity to build another income stream,” says the spokesman.

Sigma says Azoya Group, a Chinese cross-border e-commerce service provider, built the Chinese site and will help Sigma operate it. 

Amcal will sell in China through its own website and not through the big marketplaces operated by companies like Alibaba, JD.com Inc. and Amazon China. “Some of our major competitors have already entered the Chinese e-commerce market through Tmall Global,” the spokesman says, referring to the Alibaba shopping portal that caters to foreign brands. “This allows Amcal to not be in direct competition with those on the marketplaces.”

“Deterred by safety and quality issues with domestic products, particularly for healthcare and food supplements, Chinese consumers are increasingly looking to Australia to buy directly through cross-border e-commerce,” says Don Zhao, co-founder and executive director at Azoya. “We are excited to be able to offer leading Australian e-commerce businesses like Sigma with a cost-effective and risk-free approach to break into the Chinese market to meet growing demand from consumers.”

Azoya specializes in helping large overseas retailers sell online in China via their own websites. The company recently announced an agreement with French retailer La Redoute SA, No. 55 in the Internet Retailer 2016 Europe 500, to create and operate its own e-commerce site in China.

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