The decline of China's gray-market smugglers is pushing Alibaba to recruit global brands

This article was originally published on STOREBRANDS

Alibaba is on a major recruitment drive to bring U.S. and foreign brands to China. In April, executives from its cross-border e-commerce platform Tmall Global announced that it would push to recruit more than 1,000 new brands over the coming year.

This comes after Tmall Global opened an English-language portal for foreign brands to apply to sell on the platform last year; before, they had to go through Tmall Global’s business development team and lengthy, complex application processes.

And in 2018, Alibaba also announced that it aimed to sell more than $200 billion worth of products over the coming five years. Notable private label brands that sell on Alibaba’s Tmall Global platform include Costco’s Kirkland Signature brand, Walgreens’ Boots brand, and Kroger’s Simple Truth brand to give exclusive store brands global reach.  

What’s going on, and why is Alibaba so dead set on bringing American and foreign brands to China?

Chinese Consumers Love Foreign Brands, but the Gray Market Channel is Drying Up
Chinese consumers have an insatiable demand for foreign brands, including products brandished “Made in the USA,” partly due to the brand premium that they command and partly due to product quality issues prevalent in China. Top categories include milk powder, skin care products and luxury handbags. For U.S. products, Chinese consumers like buying personal care, cosmetics and food items.  Read More STOREBRANDS.