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Alibaba gateway to Chinese consumers

OTTAWA — With 2.2 million employees, 260 million customers a week and annual sales of $482 billion, Walmart is the undisputed king of global retail.

Until now.

Alibaba, the Chinese e-commerce firm, is challenging Walmart’s supremacy, and Alibaba Group president Michael Evans said that represents a significant opportunity for Canada’s food industry.

“Today about 12 percent of total retail sales in China is through e-commerce,” he told an Ottawa forum on Canada’s agri-food future.

“Over the next five years … it’s (expected) to grow to something like 35 percent.”

Evans is a Canadian who became Alibaba Group president this summer. He is a former Goldman Sachs partner and won a gold medal in rowing for Canada at the 1984 Olympics.

Alibaba has 380 million users in China, more than the population of the U.S. and Canada combined. It controls e-commerce in the country, with an incredible 80 percent of the market.

Many people associate e-commerce with books and handbags, but Alibaba’s data shows that an increasing number of Chinese consumers are buying groceries and fresh foods online. Many want to buy products from Europe and North America be-cause they don’t trust Chinese food manufacturers.

Evans said e-commerce is particularly popular in China’s second and third tier cities. Those areas, with hundreds of millions of people, don’t typically have big box stores loaded with foreign goods.

Alibaba has worked with grower associations around the world to deliver unique items to Chinese customers, including:

  • Washington state cherries
  • Blueberries and king crab from Chile
  • Avocados from Mexico
  • Spanish oranges
  • Cod and lobster from Canada

“In one single day last year, Nov. 11… we sold 90,000 lobsters in a single day,” Evans said.

Nov. 11 is a hugely important day for Alibaba. The company has turned a strange holiday, Singles Day, into a massive e-commerce event, and last year sold US$9.3 billion worth of goods on that day.

Evans said Canada’s food industry has certain products that are particularly desirable in China.

“We think beef is going to be very important to the Chinese consumer,” he said. “Canada has a tremendous opportunity … and Alibaba can be a great partner.”

An internet search showed that a handful of Canadian firms are selling beef and meat products through Alibaba’s website.

One such company is the Beef Bacon Corp. of Calgary business, which produces bacon and ham-type products from beef.

President Richard Janzen said the company has been selling through Alibaba for a while, but it’s just a small component of its marketing strategy. He said global food shows in places like Dubai and Germany are much more important for Canadian companies seeking new buyers.

“That platform is where you’re going to make the majority of your money,” he said.

“However, the internet is a good introduction.”

David Pigott of Morrison Lamothe, a frozen food manufacturer in Ontario, said he’d like to sell meat and pastry products into China, but regulations are blocking the opportunity.

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