Alibaba Group Holding Ltd (BABA) Teams Up With Unilever In Rural China Push

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Chinese online retail giant Alibaba announced Monday that it has forged a partnership with Unilever to help the British-Dutch company reach more Chinese consumers. Unilever opened its virtual store on Alibaba’s Tmall marketplace in 2011. The companies said in a joint statement that the partnership would allow Unilever to expand its distribution channels and use data from Alimama, Alibaba Group Holding Ltd (BABA) ‘s online marketing strategy.

Alibaba Group Holding Ltd – The collaboration extends beyond product sales

What’s more, Unilever will also get access to Alibaba’s cloud business to improve its online advertising strategy. Financial terms of the deal were not disclosed. Alibaba CEO Daniel Zhang said the partnership would go beyond product sales.The two companies will “jointly innovate” in Big Data analytics, supply-chain management, and cross-border e-commerce.

The consumer products giant has 400 brands in fast-moving consumer goods, personal care, and food categories. Unilever witnessed a 20% decline in its China sales during the fourth-quarter of 2014 as the Chinese economy continues to cool. The new deal with Alibaba will help it reach more customers in China “with unprecedented precision and effectiveness.” Unilever will focus on rural China, where consumer spending power is rising.

Alibaba to tag Unilever products with QR codes

Alibaba and Unilever also agreed to tag each Unilever product with unique QR codes to let customers verify the product’s authenticity. Alibaba turned to QR codes earlier this year in an attempt to fight the sales of fake goods.

Brands can tag their individual products with QR codes provided by Visualead, in which Alibaba owns a stake. And customers can scan the QR code using Taobao or Tmall mobile app to confirm the authenticity of the goods their received. The code automatically burns once it is scanned, preventing multiple uses.

Alibaba has been widely criticized by international brands and Chinese regulators over its failure to curb the sales of counterfeit goods on its e-commerce sites. In May, French luxury giant Kering Group sued Alibaba for “encouraging” the sale of counterfeit versions of its branded goods.

Alibaba emailed ValueWalk the following statement:

Alibaba Group and Unilever China announced a strategic partnership that will enable Unilever to leverage Alibaba Group’s entire e-commerce ecosystem and market data to reach customers across China with unprecedented precision and effectiveness. This agreement is a major milestone for a partnership that started five years ago with a single Tmall store. To celebrate the start of this partnership agreement, there will be a special “Unilever Week” promotion on Tmall from July 22 to 24. Full press release below and attached.

As Jack Ma pointed out during his visit to the US earlier, Alibaba Group is focused on increasing access to the Chinese consumer for businesses of all sizes around the world.  In June 2015, we launched 11 country pavilions on Tmall Global, on top of existing Korea pavilion, to allow merchants from countries such as the US, UK, and France to sell specialty items directly to Chinese consumers.

Alibaba shares rose 0.10% to $83.45 in pre-market trading Monday.

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