Kroger teams with Alibaba to sell private labels to half-a-billion Chinese consumers
Kroger is looking to make its first overseas move a big one. America’s largest operator of supermarkets announced yesterday that it will test an online store selling its private label goods in China using Alibaba’s Tmall platform.
The pilot program will initially test sales of Kroger’s Simple Truth natural and organic private label. Last year, sales of Simple Truth products exceeded $2 billion, making it the largest natural and organic brand in the U.S., according to Kroger. Simple Truth is the second largest label in Kroger’s private brands portfolio.
The retailer has made digital sales and the elevation of its own brands central elements in its Restock Kroger strategic growth plan.
“E-commerce enables Kroger to quickly scale to reach new customers and markets where we don’t operate physical stores, starting with China,” said Yael Cosset, Kroger’s chief digital officer, in a statement. “We anticipate Chinese consumers will love Our Brands — starting with Simple Truth products — just like our American customers do.”
Kroger has worked to step up its digital game in recent years with the expansion of curbside pickup at 1,250 stores and home delivery from 1,200. It recently announced the launch of Kroger Ship, a new delivery service for shelf-stable groceries similar to Amazon.com’s Prime Pantry and Target’s Restock programs. Earlier this year, Kroger signed an exclusive agreement with Ocado to have the British firm develop automated warehouses in locations around the U.S.
Alibaba, according to a Wall Street Journal report, has been actively seeking to recruit U.S. businesses to its Tmall site. In addition to Kroger, Alibaba has succeeded in getting Macy’s, Costco, Gap and Starbucks to sell their products to Chinese consumers.
- Kroger Launching Our Brands Internationally – The Kroger Co.
- Kroger to Sell Groceries on Alibaba Site in China – The Wall Street Journal
- Kroger Ship to take on Amazon’s Prime Pantry – RetailWire
- Ocado to automate Kroger warehouses in exclusive U.S. deal – RetailWire
DISCUSSION QUESTIONS: What do you expect to come out of Kroger’s test of private label sales in China? Is this the beginning of a global expansion for the U.S. grocery giant?