Suning Holdings Group makes cooperation agreement with Metcash

Cooperation agreement​

Upon signing the cooperation agreement, the duo intends for the partnership to bring increased amounts of high-quality Australian and New Zealand products to Chinese consumers.

On 8th August 2017, Suning and Metcash stated in a recent press release that following a trip to Australia, the agreement was made.

During this trip, Steven Zhang, Vice President of Suning International “engaged in discussions with local vendors, explored the local business landscape and signed a Memorandum of Understanding (MoU),”​ with Ian Morrice, CEO, Metcash, the press release revealed.

Natural quality​

Market research company, Euromonitor International, reveals that natural and niche brands deliver the strongest growth as consumers become proactive in their product selections, check ingredient listings and show a preference for natural and active formulations and ingredients.  

"With the eco-friendly environment, products from this land would gain very anticipated market share in China from the consumers who value nature and wellness a lot,”​ said Steven Zhang, Vice President of Suning International.

“The cooperation with Metcash will allow us to provide more Australian and New Zealand brands with the opportunity to enter Chinese market through the retailing platform that Suning developed,"​ added Zhang.

Through forming this joint venture, Suning and Metcash have determined a three-year revenue goal of AU$60 mn (€40.3 mn).

Double presence​

Together, the companies will plough their efforts into collectively promoting and distributing Australian and New Zealand products found by Metcash to all relevant platforms both online and offline.

Now, Suning and Metcash are in plans to create an Australian Pavilion store on Suning.com. The development of an online store will make it easier for Chinese consumers to purchase a wide selection of Australian and New Zealand items including personal care items, cosmetics and other consumer goods.

Suning anticipates that by focusing on high-quality— which research from global intelligence provider, Mintel, reveals is a core component in the decision-making process — this will build “Suning's buying power in the region”​.

As part of this agreement, Suning will handle the storage, promotion, marketing and logistics.

Unique buying trends​

Quality and cost-effectiveness are two of the leading factors impacting consumers’ purchasing decisions, as Euromonitor International reports how “the performance of beauty and personal care benefited from wider access to premium products,”​ in the Australian and New Zealand marketplace in 2016.

"If we think a product is good to introduce to Chinese consumers, we would see how it is produced originally. We visited the Community Co factories to ensure our consumers could enjoy these products in a safer and happier way,"​ commented Henry Tao, Deputy General Manager of Suning International.