Macy’s, Inc. announced Friday that it had partnered with Hong-Kong-based Fung Retailing Limited to try to operate on the Chinese market. The two companies created a joint-venture which is owed by the U.S. retailer in a proportion of 65 percent.
Macy’s plans for a start to test an e-commerce business on one of the largest and most likely to grow markets in the world. The company is confident that it may enjoy a rapid success because Chinese customers are already accustomed with the retailer on its home market.
The e-commerce business is slated to start late this year. Macy’s will sell goods through Tmall Global, a marketplace exclusively owned by the Alibaba group. Additionally, the new joint venture will be headquartered in Hong-Kong and be referred as “Macy’s China Ltd.”
According to the company, Macy’s China would coordinate online stocks sold via Alibaba and fill the orders coming from Chinese customers via the Tmall Global platform. Goods will be transported via a system set in place by Fung Retailing, while Alibaba’s payment solution Alypay will be the primary option for online customers buying at Macy’s.
Macy’s CEO Terry J. Lundgren explained that his company’s stores are a favorite destination to millions of Chinese visiting or residing in the U.S. So, the company hopes that bringing Macy’s to China would further consolidate its relationship with Chinese customers and help the business grow.
Mr. Lundgreen said that Macy’s has kept a close watch on the Chinese market’s development and trends, and reached the conclusion that there is no other key to a successful business in China than a set o reliable business partners.
“Fung Retailing has deep experience and expertise in Chinese retailing, and the Macy’s-Fung partnership will be instrumental to helping set up and operate our test,”
Macy’s CEO added.
Peter Sachse, who is in charge with the company’s business development, acknowledged that Alibaba is also a reliable business partner ever since Macy’s accepted Alipay on macys.com Additionally, the Chinese e-commerce giant also helped the U.S. largest department store conduct a successful Black Friday campaign in 2014.
And Macy’s decision to move online first in China may prove the best decision it could take since China now has 668 million Internet users, while its emerging middle-class is expected to reach 630 million in seven year’s time.
Fung Retailing has more than 3,000 retail stores in Asia, including 1,000 stores in China, and it also holds a valuable retailing experience on the U.S. market. But the reason Macy’s may have chosen it as the most reliable business partner for its China operations may be the experience it holds with Chinese customers and their shopping preferences.
Image Source: WSJ