Unilever partners with Alibaba to target Chinese market

Chinese ecommerce company Alibaba Group Holdings Ltd has signed a strategic partnership agreement with Unilever NV to help the consumer products group reach more Chinese shoppers.

The FMCG giant orginally opened a store on Alibaba’s online marketplace Tmall in 2011.  Q4 2014 saw a 20 per cent drop in Unilever’s sales in China as retailers cut inventories to deal with a slowdown in the economy.

The new partnership will allow Unilever to expand its distribution channels to reach rural consumers in China and use data from Alibaba’s online marketing unit, Alimama. The deal goes beyond distribution, as Unilever will also be using Alibaba’s cloud business to improve its digital advertising strategy. The companies will also attempt to address the counterfeiting of Unilever goods through Alibaba’s Blue Star program, which uses a unique QR code that allows consumers to verify a brand’s authenticity and origin.

“We are very pleased to amplify our partnership with an industry leader such as Unilever,” said Alibaba CEO Daniel Zhang in a statement. “[We] will jointly innovate in Big Data analytics application, cross-border ecommerce, and supply chain management.”

Marijn Van Tiggelen, Unilever’s North Asia president, described Alibaba as “the leading internet company in China, with the most innovative thinking”.

“It’s not only an online store, but also a solution platform for online payment, e-finance and e-commerce logistics,” he added. “In co-operation with Alibaba, Unilever can provide more convenient services to consumers in China.”

Unilever makes more than half its sales in emerging markets. It reported stronger-than-expected sales in the most recent quarter and said it saw signs of improvement in its major markets such as the United States, China and India.