Aldi enters Chinese retail market

1 min readUpdated Apr 28, 2017Apr 28, 20175:02 AM

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The German retailer has a unique retail model that has captured market share around the globe, but it’s entry in China will be a little bit different. On April 25 the company announced it had launched its Chinese presence through a collaboration with online retailer TMall Global.

The collaboration was announced at a fashion show organized by the two companies, where models were wearing clothes from the retailer.

“In recent years, retailers from different countries have put Tmall Global as a top choice when considering entering the Chinese market, and have achieved astounding sales,” Tmall Global general manager Alvin Liu was quoted as saying on Kejilie.com.

“Tmall Global is very honored that we can collaborate with Aldi this time to explore new retailing opportunities together, and we believe that Aldi, known for its top-quality products, will be able to better meet the demand of Chinese consumers.

The story reported Aldi China CEO Christoph Schwaiger as describing the collaboration as the start of Aldi’s journey in China.

“We will try our very best to fulfil the promise to provide Chinese consumers with premium lifestyle products, and will proactively boost the growth of China’s retail scene and consumer spend,” he was quoted as saying.

Since March 20 when Aldi did its first trial on the Tmall platform, hundreds of SKUs (stock keeping units) have already been put online to complement the usual spending habits of consumers in China’s first and second tier cities.

During the trial period, products such as milk powder (for adults), honey and mixed nuts were bestsellers, and even ran out of stock. To solve the problem, Aldi was forced to ship in new stocks from Australia.

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What this means

Aldi's online-only debut in China, using Tmall Global, is a pragmatic, capital-light strategy that sidesteps the significant investment and risk of direct physical store expansion, a common approach for international brands like Alo Yoga. By focusing on consumer spend in first and second-tier cities with existing high-demand SKUs such as milk powder and honey, Aldi minimizes initial overheads. This approach, while less audacious than Panpuri's planned 16-store Asian expansion, pressures rivals to innovate their market entry tactics or risk losing online mindshare. The core risk lies in establishing brand recognition and loyalty without a physical footprint in a diverse, competitive market. We will be watching for the formal opening of dedicated Aldi Tmall Global stores.

Aiko Tanaka

Questions & Answers

How will Aldi's entry into the Chinese market differ from its usual retail model?

Aldi has launched its Chinese presence through a collaboration with the online retailer Tmall Global. This is a different approach compared to its established global retail model.

What kind of products did Aldi offer during its initial trial period on Tmall?

During the trial on Tmall, Aldi offered hundreds of SKUs. Bestselling products included milk powder (for adults), honey, and mixed nuts, which even ran out of stock.

Which cities are Aldi targeting with its online product range in China?

Aldi is targeting consumers in China's first and second-tier cities with its online product range. The products are chosen to complement their usual spending habits.

What action did Aldi take when popular items ran out of stock during the trial?

When bestsellers like milk powder, honey, and mixed nuts ran out of stock during the trial period, Aldi had to ship in new supplies from Australia to meet demand.

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