Metcash inks deal with Chinese retail giant
Grocery wholesaler Metcash has inked a deal with Chinese retail giant JD.com to expand its fresh-food convenience concept into the world’s most populous country.
Metcash’s Fresh Pantry brand will be launched on JD’s e-commerce platform under the deal, delivering its range of Australian and New Zealand products to Chinese shoppers.
The move is a step-up in JD.com’s investment in Australia after it launched its local office in Melbourne earlier this year, while Metcash while gain a valuable foothold in China that will diversify its business beyond Australia’s lower growth market.
Metcash’s Fresh Pantry concept currently trades across two physical locations in Australia, and while there are no plans to extend the brand further locally, Metcash believes Chinese e-commerce could be a lucrative vertical.
“The store on JD Worldwide will look to become the pre-eminent platform for Australian and New Zealand products and deliver an authentic Fresh Pantry shopping experience to consumers in China,” Metcash’s head of China operations Will Zhao said in a statement.
Fresh Pantry sells a range of in-demand Australian food, household, baby & maternal, wine and healthcare products, delivering skincare brands like Vasse Virgin and Australian Diaries to the Chinese market for the first time.
JD.com’s president of international Winston Cheng, who visited Australia earlier this year for its office opening, said the deal was in line with its strategy to satisfy Chinese appetite for quality ANZ products.
“Chinese online shoppers grow ever more sophisticated and discerning, they are gravitating to high quality Australian food and healthcare brands. I am confident that Fresh Pantry, with its focus on quality and selection, is an excellent fit for our platform,” he said.
Increasing its exposure towards the fast-growing Chinese market makes sense for Metcash, which is facing a variety of headwinds at home as major chains Coles and Woolworths increase their investment in fresh categories.
German entrant Aldi is also increasingly weighing in on the category, while yet-to-launch chain Kaufland is slated to invest heavily in fresh food from the word go.