• Business Insider

Target has partnered with Alibaba's Tmall to sell in China


Mass merchant Target has partnered with Alibaba to sell goods in China via the Tmall e-commerce marketplace, reports Internet Retailer.

Target has its own storefront page on Tmall where shoppers can easily browse all the items it offers for sale in one place. The retailer's decision to expand to China capitalizes on the country's thriving cross-border market, which is likely encouraging numerous retailers to look to the country for growth.

Expanding to China benefits Target in two major ways:

  • Target's e-commerce business will likely grow: E-commerce accounted for just 3.3% of Target's total sales during Q2 2016. Despite year-over-year (YoY) growth in the "mid-teens," Target still relies heavily on its brick-and-mortar sales. Expanding to a new market opens up a new revenue source and can help the company become a stronger e-commerce player.

  • Target will gain a footing in the rapidly growing cross-border market: The cross-border e-commerce market in China is rapidly growing, being driven primarily by consumer preferences for foreign-made products. In fact, over 60% of Chinese consumers are willing to pay more for products that are made in the US as opposed to China, according to a report from the Boston Consulting Group. Target's Tmall storefront will likely draw a lot of traffic as an American brand and can help generate a lift in online sales for the merchant.

China is becoming an increasingly important resource for merchants to grow online sales. Target's decision to sell in China follows numerous other international brands partnering with both Alibaba and JD.com, including Converse, Nautica, and Unilever. It is estimated that over 15% of the Chinese population will make purchases from a foreign country this year, amounting to over $85 billion in sales, according to eMarketer. And this number is expected to reach $157 billion by 2020.

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