Department store operator Century Ginwa Retail Holdings Ltd. (00162.HK) is preparing to launch an e-commerce site and offer quality and personalized products to Chinese online shoppers, throwing a challenge to sector giant Alibaba.
The online retail platform, to be launched in June, will offer European brands in product categories ranging from accessories and clothing to processed food, chief executive Edwin Choon Hoi-kit said.
The distinctive products will make the platform stand apart from Alibaba’s Taobao and Tmall, he said.
“When you go to the pet store in Tmall, there are more than 90 stores with tens of thousands of items, which are only categorized by their prices. You have no idea about the quality… This is the biggest problem,” Choon said.
Century Ginwa’s new online platform won’t have such issues, he said in a media briefing in Hong Kong Thursday.
Choon said the products offered by his firm’s online platform won’t be found easily in physical stores.
“Most people turn to online stores when they cannot find the products they want in brick-and-mortar stores,” he noted.
The online platform aims to serve Century Ginwa’s existing 300,000 store membership holders in northwest China, where the company operates.
Choon said that the company plans to include 50 brands in the initial launch of the platform, and that is in talks for possible acquisition of some of the brands.
The online store is expected to contribute up to 20 percent of Century Ginwa’s revenue in the first year after the launch, the CEO said.
The department store operator’s net profit fell by nearly half to HK$124 million for the six months ended June last year. The full year report will be unveiled by the end of this month.
The company is now operating seven mid- to high-end department stores and seven supermarkets in Shaanxi, and one department store in Urumqi in Xinjiang. About half of the shopping malls are self-owned properties.
Choon said the company will continue to invite more international big brands to the department stores to improve the tenant mix.
Retail business in northwest China has not been affected much by Beijing’s anti-extravagance campaign and the nation’s economic slowdown, he said.
Demand is still robust in the region unlike some other parts of China, Choon said.
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