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    Costco Cooperate With Tmall To Test Water China

    2014/10/27 21:10:00 100

    CostcoTmallChina

       Weak growth in the US market

    Beijing time on October 14th, the second largest retailer of the United States Costco and Alibaba group's Tmall International announced the opening of strategic cooperation. Costco started the "curve" into the Chinese market by way of opening official flagship store in Tmall.

    Costco is the largest chain member storage store in the United States. At present, Costco has more than 500 branches in 7 countries, most of which are located in the United States, while Canada is the largest foreign market. Costco already has 72 million members, and its members spend only 55 to 110 dollars on their single consumption.

    Recently, however, Costco has been weak in the domestic market. Up to May 11th, the latest quarterly report shows that Costco sales in the US account for about 72% of its total global revenue, while the US and Canadian markets have less than 7% growth, of which Canada's growth rate is about 2%, while other market revenues are relatively low, but the growth rate is 15%.

    The temptation of Costco in China's emerging market is undoubtedly enormous. According to the Ministry of Commerce's China Electronic Commerce report (2013), China in 2013 Electronic Commerce Transaction volume exceeded 10 trillion yuan, an increase year on year 26.8% In which retail sales exceed One point eight five Trillion yuan, accounting for the proportion of total retail sales of consumer goods. 7.8% Surpass the United States as the world's largest online retail market. Such data can not be heartbeat, Costco global executive vice president Jim Murphy (Jim Murphy) said: "in the face of China's consumer demand for imported goods growing consumer demand, Costco sees and is optimistic about China's consumer market in the present and future great growth space."

    Many international retailers in China have tried to find products and storefront designs that meet the tastes of Chinese consumers. However, the performance of WAL-MART, best buy, eBay and other retailers in the Chinese market is disappointing.

    Sales growth of WAL-MART in China in the two quarter 1.1% But the same store sales data declined. 1.6% 。 David Cheesewright, WAL-MART's international business director, admitted at the October 15th investor conference that China's business remained unsatisfactory after 17 years of operation.

       Short term difficult to change cross-border e-commerce layout

    At least for now, Costco, WAL-MART's only feared company, is not enough to change the territory of cross-border electricity providers in the short term.

    Open Costco's Tmall international store "Costco overseas flagship store", the page is very "refreshing" - all merchandise shows only 1 pages, from head to tail, a total of 70 goods. Compared with the large chain retailers who have thousands of products or even tens of thousands of commodities, there are not many kinds of Costco shops available in Tmall.

       Tmall The responsible person briefed the new financial reporter: "Costco cuts into the category selection from food, health products and other superior categories. There are two main considerations: first, food and health products are related to shelf life and food safety standards. Chinese consumers choose the most authentic, safe and fresh products in this category of imports, first of all to satisfy this point. Second, price setting will refer to the price of all related retail platforms of Tmall international and Alibaba group. "

    Among overseas businesses, the most popular among Chinese consumers should be imported food. As of October 25th, the top three sales of Costco overseas flagship stores were imported foods, namely, Ocean Spray Cranberry dry 1360g, Klan salt baked integrated nuts 1130g and Kirkland flavored 1130g nuts.

    However, the top two sales are pre-sale goods, which means that the first ranking of the actual sales is the Kirkland flavored synthetic nut 1130g, which costs 129 yuan plus 20 yuan, and 5662 pieces are sold. However, only 175 customer evaluations have been received, that is, most people have just received the goods and haven't tasted the experience well, or have not yet completed the receipt.

    Some customers wrote in the evaluation that "it was too slow for 10 days," expressing dissatisfaction with its delivery speed.

    Most of the goods on Costco Tmall flagship store will be issued from Taipei, with postage ranging from 20 to 40 yuan. Unlike conventional online shopping, freight charges for Costco are calculated by item, which has caused some consumers trouble. For example, for a toothpaste plus several other items, the shipping cost has already been up to 200 yuan. What also worries consumers is the Costco Tmall flagship store prompts in the shopping tips: "to facilitate customs operations, please pay a sum of not more than 500 yuan", in addition, they also need to provide personal identification cards, the distribution time is 5 to 20 days.

    At the same time, the price war between Costco and shop No. 1 of WAL-MART will be fierce. The price of toothpaste Sensodyne four launched by Costco in the opening special offer is 145 yuan, while the price on the first shop is 109 yuan.

       comprehensive Bonded mode Top priority

    When Costco will fully open the bonded mode will be very important for its future development in the Chinese market. If we want to maintain the rich and cheap goods in the Chinese market, we must first let the bonded mode land. " An e-business insider said to the new financial reporter.

    In accordance with the relevant provisions of the state's support for the retail export of cross border e-commerce, the policy of "big tax entering and sending out" is implemented in the pilot area of Shanghai free trade zone and other bonded areas. The imported bulk goods can be imported into the pilot bonded area by means of logistics, and can be divided into small parts in the area and sent directly to individuals, which greatly reduces the postage. In addition, it replaced the original "trade tax" of customs duties + VAT + consumption tax, which stipulates the favorable policies such as "tax exemption under 50 yuan per piece, exemption from 10% to 30% tax on different commodities".

    On the other hand, it is not so easy to enjoy the preferential policies for cross-border e-commerce. One of the difficulties is to get through the customs credit information system and the platform, and the tightness of the policies implemented in the bonded areas is also different. Shortly before the day of the cat's 11 double conference, Tmall President Wang Yulei answered reporters' questions that Tmall's cooperation with the bonded areas is still under way.

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