Unilever, the global consumer goods company, which has streamlined its brands from more than 2,000 to 4,000 plus, is planning for the expansion of its business in China by entering into a partnership with Alibaba, an giant e-commerce operator in China. Unilever and Alibaba have formally signed a strategic agreement on July 20, 2015, in Hangzhou, with the two firms planning on working together to expand in domestic markets and the cross-border e-commerce, as per the statement issued by Unilever.
In an interview, the president of Unilever North Asia, Mr. Marijn van Tiggelen stated that his firm will introduce brands that are currently not available in China using the platform of Alibaba. In 1986, Unilever entered the Chinese market, where it only offers around 20 products of its more than 400 brands, at present.
The strategic launching of more brands into China, is a move, which is caused by the falling of Unilever's sales in emerging economies. 2014, Unilever reported a decline of 2.7% sales, with the market in China reporting declines of more than 20% over the 3rd and 4th quarters.
According to Mr. van Tiggelen, the firm have noticed that more and more Chinese tourist have been purchasing consumer goods over their overseas trips in the previous two years, and Unilever have hopes tied to the introduction of these products, which are available only in overseas markets.
The launch of a new product into China through the convention retail channels often requires to go through a long duration between regulatory review and the establishment of distribution, whereas, e-commerce platforms provides a easier and less expensive alternative, stated Mr. Jeff Zhang, the head of the Retail Marketplaces division of Alibaba in China.