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Chemist Warehouse to open bricks-and-mortar store in China

Chemist Warehouse is opening its first bricks-and-mortar store in China, which will be located in Zhengzhou City, Henan Province.

Nancy Jian, Chemist Warehouse’s chief operating officer, told Inside FMCG that it will drive customers in store through its over 700 million database, and will utilise learnings from Alibaba and Tmall to ensure it is stocked with products tailored to the Chinese customer.

“Store setup and merchandising of the store [will be] very similar,” Jian said.

“[The] difference will only be currency and pricing structure; some product range and brands we keep in this store will be different as we started global sourcing this year – sourcing more cross-border brands globally that are more suitable for the Chinese consumer.”

Chemist Warehouse is the number one cross-border seller on Alibaba’s Tmall marketplace, though Jian noted shopping online can be distracting to customers, and that a physical presence would give buyers more confidence in cross-border products – as they will be able to see, touch and feel the products prior to purchase.

“We are hoping to create a more real shopping experience for our customers,” Jian said.

“Consumers walk in the store, grab a basket, shop around the store, and when they come to purchase the product, they show their ID to finalise the purchase and walk away with their shopping bag after a few minutes of custom clearance.

“It is a new model, and it will be a pilot store for this new policy.”

Chinese law dictates that customers purchasing cross-border products are required to provide a valid Chinese ID, which will be provided by the vendor to China Customs electronically to complete the purchase.

This pilot store will be rolled out across other cities in China following the launch.

Chemist Warehouse initially partnered with Alibaba in 2015, and became the first cross-border retailer in the world to achieve 10 million RMB (AU$2.1 million) in gross merchandise volume during Alibaba’s 11:11 global shopping festival.

Year-on-year sales for Chemist Warehouse’s flagship store on Tmall grew at a rate of 52 per cent, largely based on the popularity of its beauty and mums-and-bubs products.

Earlier this week, the discount pharmacy retailer announced it had extended this partnership for two more years, and would expand beyond Alibaba’s Tmall marketplace onto its recently acquired Kaola, as well as Lazada.

While Kaola is a marketplace that focuses solely on cross-border brands in China, Lazada trades within other regions of South-East Asia, expanding Chemist Warehouse’s reach into Singapore, Malaysia and the Philippines.

“The exciting part for us is to continue growing our cross-border business, not only in China but hopefully soon in South-East Asia,” Jian said.

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