Unilever partners with Alibaba to reach rural markets

Want China Times, Staff Reporter 2015-07-23

Unilever's company logo at an expo in 2013. (File photo/CFP)

Global consumer goods company Unilever, which streamlined its brands from over 2,000 to 400 plus, is planning to expand its offerings in China through a newly formed partnership with e-commerce operator Alibaba, according to the Economic Observer.

Unilever and Alibaba formally signed a strategic partnership deal in Hangzhou on July 20, with the two companies planning to work together on expanding in rural markets and cross-border e-commerce, according to a statement released by Unilever.

In an interview with the newspaper on July 14, Unilever North Asia president Marijn van Tiggelen said his company will introduce brands currently not available in China through Alibaba's platforms.

Unilever entered the Chinese market in 1986 where it currently only offers around 20 of its more than 400 brands, the newspaper noted.

The planned introduction of more brands into China, the newspaper said, is an aggressive move caused by Unilever's falling sales in emerging markets.

Unilever posted a 2.7% sales decline in 2014, with the Chinese market having recorded declines of over 20% during the third and fourth quarters, the newspaper said.

According to van Tiggelen, the company noticed that more and more Chinese travelers have been buying consumer goods during their overseas trips in the past two years, and Unilever hopes to introduce these products only available in overseas markets into China.

The introduction of a new product into China through traditional retail channels often needs to go through a long period of time between regulatory review and establishment of distribution, while e-commerce platforms present a cheaper and easier alternative, said Jeff Zhang, head of Alibaba's China Retail Marketplaces division.

Under the newly signed deal, Unilever plans to launch a marketing campaign through Cun.Taobao, an Alibaba platform targeting rural markets, every quarter, the newspaper said.

Unilever is also interested in working with Alibaba on the Chinese company's payment service Alipay, rural operations Cun.Taobao and big data, van Tiggelen added.

According to Zhang, Alibaba is trial running a system established for vendors in rural regions to order goods through Alipay, and Unilever is one of the companies that will take part in the trial operations.

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