American leading retailer Costco has reached a strategic deal with Tmall.com, Alibaba Group's B2C website, to open a flagship store on this Chinese website.
The new Costco flagship store will reportedly start with food and health products. In the future, Costco will launch more retailing brands on its Tmall flagship store to improve its brands, categories and product quantities.
Costco is a membership supermarket in America; however it does not have a membership fee on Tmall. Chinese consumers can buy products which are originally only available to Costco members.
Jim Murphy, global executive vice president of Costco, said that Chinese consumers have increasing demands for imported products and Costco is optimistic about the huge potential growth space in this marketplace. Based on the strategic cooperation with Tmall, Costco will be able to provide a direct shopping channel to the Chinese consumers.
Costco will adopt a bonded mode for its sales in China. Its products will first ship to six cross-border pilot cities and store in bonded warehouses. After consumers place orders, products will be shipped from bonded zones, which will save costs. In addition, Alibaba will cooperate with Costco to provide free shipment to consumers.
As a leading membership warehouse-style supermarket in America, Costco has 72 million members around the world. The company has strict standards for brands and products and it provides seasonal exclusive products to consumers, forming its unique competitiveness.