Kroger to sell private label products in China through Alibaba

(Reuters) - Kroger Co (KR.N) has partnered with Alibaba Group Holding Ltd (BABA.N) to sell its private label products on the e-commerce giant’s Tmall platform in China, making its first venture outside the United States.

The Kroger supermarket chain's headquarters is shown in Cincinnati, Ohio, U.S., June 28, 2018. REUTERS/Lisa Baertlein/File Photo

The U.S. grocer will sell its Simple Truth products on the online platform “to meet Chinese consumers’ growing demand for high-quality, organic food products,” an Alibaba spokesman told Reuters on Tuesday.

Shares in Kroger jumped 2.4 percent to $30.45 in afternoon trading.

Kroger is the largest U.S. supermarket operator, with some 2,800 stores in roughly three dozen states.

The move from Cincinnati-based Kroger comes as the $800 billion U.S. grocery industry battles Amazon.com Inc’s (AMZN.O) aggressive expansion into groceries.

“E-commerce enables Kroger to quickly scale to reach new customers and markets where we don’t operate physical stores, starting with China,” Yael Cosset, Kroger’s chief digital officer, said in a statement.

Kroger is undergoing it biggest shift in strategy in two decades and has unveiled a series of online initiatives.

It offers curbside pickup of groceries ordered through its own supermarket websites.

In May, Kroger inked an exclusive U.S. deal with British online grocer Ocado (OCDO.L) to build automated warehouses to fulfill curbside and delivery orders.

It also launched a beefed-up online shopping service called Kroger Ship that sends packages directly from its distribution centers via United Parcel Service Inc (UPS.N) and FedEx Corp (FDX.N).

Kroger said it is the world’s third largest retailer by revenue, with sales of $122.7 billion last year. Its Simple Truth brand currently generates $2 billion in annual sales.

Additional reporting by Uday Sampath in Bengaluru, Lisa Baertlein in Los Angeles; Editing by Anil D'Silva and Diane Craft

(Original source)