Multinational JV to sell imported household items
Print Edition
FIVE companies from three countries are cooperating to sell imported popular household products like diapers and milk powder in China to tap a growing market for premium foreign products.
They are Itochu, Japan’s third-largest trading house; Charoen Pokphand Group, Thailand’s biggest conglomerate; and Chinese companies CITIC, China Mobile and Shanghai Information Investment Inc.
A deal on the joint venture, Face to Face Co, was inked yesterday. The partners are investing US$500 million in it.
The venture will operate through a cross-border e-commerce website out of the Shanghai free trade zone to benefit from preferential policies offered by the FTZ.
Until now, most consumers buy such products mainly through gray market channels, expensive offshore orders, overseas trips or limited online retailers in China.
“We predict the scale of cross-border e-commerce in China will jump from nearly 76.7 billion yuan (US$12.4 billion) in 2013 to about 1 trillion yuan by 2018, Itochu said in a statement yesterday. “We see huge demand for premium products in the country.”
Japan’s Nikkei newspaper reported that the new venture plans to accrue sales of US$666.7 billion by 2019 and plans to list in China in 2020. The report could not be immediately verified.
Itochu said the venture will begin operation later this year, offering nearly 100,000 Japanese-made items, including household appliances, food, diapers, milk powder and possibly clothing.
Charoen Pokphand said it plans to sell Thai food products on the site.
The joint venture will take over online shopping mall Kuajingtong, which was formerly run by state-owned Shanghai Orient Electronic Payment Co, to run its operations.
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