Kroger partners with Alibaba in China grocery sales venture
S E E D E D C O N T E N T
(Reuters) - Kroger Co ( KR.N ) has partnered with Alibaba Group Holding Ltd ( BABA.N ) to sell nuts, supplements and other products in China, venturing outside the United States for the first time in what is fast becoming a fierce global battle to dominate online grocery sales.
Kroger will sell Simple Truth brand products on the e-commerce firm’s Tmall Global virtual storefront “to meet Chinese consumers’ growing demand for high-quality, organic food products,” an Alibaba spokesman told Reuters on Tuesday.
Shares in Kroger, the largest U.S. supermarket operator with $123 billion in 2017 sales, closed up 2.35 percent at $30.45 on news of the deal.
Kroger’s arrangement with Alibaba raises the stakes for rival U.S. grocery seller Walmart Inc ( WMT.N ), which along with its Chinese partner JD.com Inc ( JD.O ), is already fighting Alibaba for dominance in the world’s second biggest economy.
“E-commerce enables Kroger to quickly scale (up) to reach new customers and markets where we don’t operate physical stores, starting with China,” Yael Cosset, Kroger’s chief digital officer, said in a statement.
The latest move from the 135-year-old grocer comes as the $800 billion U.S. grocery industry wrestles Amazon.com Inc’s ( AMZN.O ) aggressive expansion into groceries through its purchase of specialty retailer Whole Foods Market and other efforts.
Kroger responded with its biggest strategy shift in two decades and already has unveiled a series of online initiatives.
Those include inking an exclusive U.S. deal with British online grocer Ocado ( OCDO.L ) to build automated warehouses to prepare curbside pickup and delivery orders, and launching a beefed-up U.S. online shopping service called Kroger Ship that sends packages directly from its distribution centers.
Kroger said its Simple Truth natural and organic products, which generated $2 billion in sales last year, will be sold in China beginning on Wednesday. Initial offerings include almonds and multivitamins.
Walmart and JD have been tightening their alliance to counter Alibaba’s dominance in China’s grocery sector, where the share of online business is expected to more than double to 6.6 percent by 2020, according to research firm IGD.
JD.com, the second-largest e-commerce retailer in China, serves as an online shopping platform for many Walmart stores in the country. The U.S. retailer holds a 12 percent stake in the Chinese company.
Earlier this year, Walmart opened a small high-tech supermarket and partnered with JD to deliver groceries from the store, in a bid to compete with delivery from Alibaba’s Hema Fresh stores.
Walmart and JD also co-invested $500 million in a Chinese online grocery and delivery firm to check Alibaba, which is rapidly expanding its retail network, investing in brick-and-mortar stores and cutting deals to combine shoppers’ online and offline experience.
Additional reporting by Uday Sampath in Bengaluru, Lisa Baertlein in Los Angeles and Nandita Bose in New York; editing by Diane Craft and Tom Brown
My last two articles re the trade war were well received and although there were differing opinions on them everyone presented their side without rancor and there were some good ideas from both sides.
Hopefully this article will do the same.
I have little experience with on line grocery shopping with the anyone but a few small specialty sellers in specific foods which are delivered via UPS/Fed EX/USPS.
It seems that there is a world wide grocery war going on with billions of dollars be invested. Kroger partnering with Alibaba is a big deal in the tech world.
Lets have your ideas/thoughts experiences on this new world for us old folks.
We live in the country so we usually go to the local market which is Harter House.
As I said earlier I do order some specialty foods, wild rice and natural jams and honey over the net.
The tie up between Kroger and Alibaba and the Walmart tie in in China opens up a whole new world. It seems that corporations are going to align themselves with the best partner in the biggest market in the world.
A couple that I know in the Chicago suburbs order all of there groceries online. The do a ton of Grubhud ordering too. They just retired and both were pretty highly paid pros so they have the $ for it.
What surprised me was that they used to grow a pretty extensive 'victory garden' but have downsized in house and yard in the last 2 years. I much prefer to pick out my own vegies, at least the few that I don't grow. I buy bulk meat from a farmer/butcher so that is taken care of. My mom is in her 80's and still grows most of her vegies with my help.
See my response above. I don't know how in the world I did that....Old age I guess Dulay.
I like Kroger, and as a kid our family used to shop there but now it's rare to see a Kroger in the northern half of Ohio, even though their headquarters are in Cincinnati. Meijers, Walmart and Giant Eagle are far more common around here.
They are everywhere in Texas, new ones popping up all the time.
The closest to me is on the west side of Mansfield, that is almost an hour away. My favorite grocery is Acme Fresh Market chain in the Akron area.
What really interested me in the article is how large the on line shopping market has become. With Kroger first venture overseas being in China and the tie in with Alibaba is most interesting.
Along with Walmart the corporations are going to go where the future growth is and it seems that they are betting on China.
When we are at Kroger there are almost always 2 or more "online personal shoppers" picking groceries for their customers, advertising their service(s) on their custom shopping carts.
Sometimes the customers ( Walmart ) just pick up outside in a designated area ( been asked to move my vehicle from there ).
Others like Kroger, shop, pick, buy and deliver and make a decent income.
I read a story the other day where a teacher in Florida quit his job (low pay) and became a personal shopper and was making $100K per year...
I will use online services for some specialty items as well, but like using the regional/local Weiss Markets.
Pretty much all of their offerings are good, but, although they have a large selection of hot sauces and some are very tasty, yet the need a good bit of cayenne to give them some life.
The Walmart has a spicy habenero sauce that is good; a red and a green. Online helps with the more spicy options.
I have to be honest about Alibaba. I won't use them. A couple years ago, three times, about 3 to 6 months apart, purchasing from different vendors, I found a pick pocket helping themselves to my account. I would have concerns there and I prefer pay pal these days.
I have never had trouble with Amazon, even the branch in Germany, but a lot of their prices are not as good as they used to be.
The one word I would pass along to anyone thinking of using these services is caution.
Springfield MO is 40 north of us and the German grocery discounted Aldi opened there a few months back. Damn good prices and good products, most are their own brand and the few that I've tried have been good.
I've not been involved with Alibaba so I have no opinion on them.
With Kroger moving into the international arena with Alibaba in China to me is most interesting.
It is their first venture outside of the US.
I didn't purchase any meat there, but the other products were fine and inexpensive.
There are a lot of items being sold on Amazon that are knockoffs or previous returns.
There is an Aldi around the corner from my office and they have many items that are very good but there are also a few things that I would not buy.
Fortunately the way the products are categorized you can tell when it is not original or brand new. At least for things I get.
If i see an Aldi, I'll drop in if i have the time.
If they are sold and fulfilled by Amazon itself they are real, but if they are sold by an outside vendor they might be returns or fakes.
Aldi has great French bread and the other specialty breads and their steak sauce (Bermans) is very good. I dont like their new whole bean coffee or the Greek yogurt. The fresh chicken is good as is the imported ham, but stay away from the beef. The cheese tends to be good as is the hummus.
That is good enough to get my curiosity started.
Around here I have heard Aldi radio commercials, but haven't seen one.
Interestingly enough quite a few Aussies I speak with mention Aldi from time to time.
With Kroger moving into international territories, I wonder what sort of scrutiny this will get? Now 2 big outfits, Kroger and Walmart, have eyes on the potential offered by China. I wonder if they are going to raise any tariff concerns?
(Oooops, this was supposed to be a reply to you Kavika.)
That's what I find the most interesting dave....Right in the middle of a trade war they announce that they are tying themselves in with a Chinese company and will be doing business in China...
The response should be interesting.
Yep, I'm kind of waiting for the other shoe to drop on this.
But, then again, it might fly under the radar?
I don't think that it is going to fly under the radar dave. Kroger is just too damn big as is Alibaba to miss this one.
Not a damn thing the administration can do about it anyway.
LOL
For some reason I am picturing Inspector Clouseau.
The one and only!
Depending on this whole trade war thing, it might be a good time to make some investments.
I love the Inspector...LOL
Does your dog bite?
Only her kibble.
Dear Brother Kavika: What I want to know. preferably from our good friend Buzz is after this partnership takes hold, will American take-out be big in China?
Enoch, Swimming in Ketchup and Soy Sauce.
E.
I'm sure that it will niijii...Soy sauce and American style sticky rice.
Kavika sharpening his chop sticks.
Take-out from Chinese restaurants here has existed for as long as I've been here. There are generic services using motorbikes that deliver, besides bigger restaurants having their own delivery service.
I have only been taking advantage of e-purchasing for a couple of years, and have discovered considerable savings on many items we have purchased. However, we e-purchase food items if they are canned or sealed in some way and have a long shelf life, like coffee or Ocean Spray Light Cranberry Juice, but my wife really knows her fruit, veggies, meats, fowl and fish. She has gone into a wild field and come back in a half hour with enough edible greens for a meal. There are veggie farms within walking distance and she buys directly from the farmers - she knows the product, and how to talk and bargain with them - after all, she grew up on a farm in the Chongqing rural area where they grew everything, including rice. We prefer to shop at small fresh food shops, such as the local butcher, but we still shop at supermarkets for many things we cannot get from the farmers - bananas, bread products, etc. for example. Of course, not only is my wife a careful and frugal food purchaser, she is an amazing cook. We rarely go to restaurants.