China Colruyt and Sainsbury’s Tap into Asian Markets for Growth
Belgian’s Colruyt and Sainsbury’s in the UK are both looking to tap into growing demand for quality food in China. Colruyt has started to test the sale of private labels via Alibaba’s Tmall platform. Meanwhile Sainsbury’s, which already sells online via Tmall in China, has teamed up to supply a selection of private label lines to Dairy Farm outlets in Hong Kong.
Colruyt is offering a range of around 50 items on Tmall in a trial lasting several months. The range includes Colruyt’s cult brand Cara Pils as well as other ambient items such as mustard, mayonnaise, ketchup and cornflakes. Initially, the Belgian market leader will focus on professional clients.
Meanwhile, Sainsbury’s has a supply agreement that introduces more than 200 private label products to Market Place by Jasons, selected Wellcome, ThreeSixty and Jasons stores in Hong Kong. The items are taken from its leading private label lines including Sainsbury’s, Taste the Difference, FreeFrom and Sainsbury’s Organic and include fresh as well as ambient products. As an initial promotion, customers spending HKD70 (EUR8.21) or more on Sainsbury’s products receive a free Sainsbury’s jute bag.
Denise Klug (Senior Retail Analyst)
Opinion Low Risk Test and Learn
Opportunities in China and Hong Kong are increasingly attractive for European retailers. These moves both demonstrate how retailers can generate additional revenue overseas and tap into the demand for quality food items, without the need for a physical presence.
The number of Western European retailers selling goods via Alibaba’s Tmall platform is growing rapidly. In addition to Colruyt and Sainsbury’s, other retailers selling online in China include Aldi, German drugstore chain dm and Marks & Spencer.
The moves of all these players come with a low risk. However, while the Sainsbury lines are likely to find a receptive market, we are not sure about Colruyt’s own brands. Cara Pils – which is probably the most interesting private label Colruyt offers on Tmall – is considered a cult brand and as Belgian as Belgische frieten but at the same time it remains an insider product. It is a private label sold at a budget price (currently available for EUR32 per 33cl can) with a very basic design but still Cara Pils’ standing amongst Belgian shoppers is extraordinary. However, is this enough to also create curiosity and buying desire amongst Chinese customers? It is a very likely scenario that Cara Pils – spoiled by success in its home market – will be less popular abroad.
With contributions from Senior Analyst Lisa Byfield-Green.