We might not have heard a lot recently from Amazon, but that doesn’t mean it’s not still near the top of the grocery retail food chain—and at the top of retailers’ minds. In response, major competitors Walmart and Kroger have been circling overseas markets in an effort to knock Amazon out of that coveted top spot.
This week, Kroger announced it is diving into the Chinese market and is teaming up with Alibaba, one of Walmart’s biggest rivals, to launch an online storefront on Alibaba’s Tmall Global platform. The company's stock shot up, presumably in response to its new partnership that will significantly expand its international footprint.
Kroger’s new online store will introduce Our Brands and Simple Truth® products to international customers for the first time. According to a press release, Simple Truth has grown to be the second-largest brand sold in Kroger stores since its launch five years ago, while Alibaba’s Tmall Global platform is one of China’s largest business-to-consumer marketplaces that provides international brands and retailers a place to build virtual storefronts and ship products into China. By combining the two in a strategic move, Kroger hopes to continue its brands' success with Alibaba’s half a billion consumers.
“E-commerce enables Kroger to quickly scale to reach new customers and markets where we don’t operate physical stores, starting with China,” said Yael Cosset, Kroger’s Chief Digital Officer. “We anticipate Chinese consumers will love Our Brands—starting with Simple Truth products—just like our American customers do. Kroger is proud to continue to lead the way in making natural, organic, and free-from products more mainstream and accessible. Sharing Kroger’s exclusive brands and status as a food authority the world over is exciting.”
He added that, as the world's third largest retailer by revenue—$122.7 billion in sales in 2017—the company is creating the grocery retail model of the future by focusing on digital and technology.
How will Amazon, Walmart, and more major grocery players respond to Kroger’s new international strategy? Deli Market News will keep its eyes peeled for the latest news.
