Business Irish

Wednesday 21 February 2018

Alibaba deal gives 40,000 Chinese customers taste of SuperValu food

Musgrave eyes expansion of range as it targets 'huge opportunity' for growth

David O’Flynn, head of business development at Musgrave Group Photo: Michael O'Sullivan/OSM Photography
David O’Flynn, head of business development at Musgrave Group Photo: Michael O'Sullivan/OSM Photography

Simon Rowe

Cork-based retail group Musgrave has notched up an estimated 40,000 customers in China since its own-brand products launched on internet giant Alibaba in March.

Musgrave started exporting SuperValu products to China on St Patrick's Day this year and business has grown steadily, with the retail group considering expanding its range to include products from other branded Irish suppliers.

Musgrave - which controls the SuperValu and Centra brands here - uses Alibaba's Tmall ecommerce platform to sell SuperValu breakfast cereals, coffee, jam, biscuits and other products to consumers.

Chinese shoppers are increasingly purchasing overseas products through online shopping.

Alibaba is China's biggest e-commerce group, handling more transactions each year than eBay and Amazon combined. Jack Ma, its chairman, pledges to serve two billion consumers around the world within 20 years.

Musgrave offers 40 own-brand products for sale on Tmall Global, selling directly to Chinese consumers.

The company is the first Irish firm with a presence on the platform. Its top-selling products are SuperValu Wheat Biscuits and Signature Tastes Muesli.

It has a SuperValu storefront on the Tmall Global website. A large number of retailers such as Sainsbury's from the UK, Costco from the US, Spain's Dia, and Germany's Metro also have storefronts on the website.

"Working with Alibaba has allowed Musgrave to enter the Chinese market and we are developing our understanding of the Chinese consumer," said David O'Flynn, head of business development at Musgrave Group.

"As our understanding grows we plan to tailor our range of SuperValu own brand products and potentially expand the range to include products from other branded Irish suppliers.

"The global growth opportunity is certainly in China. The region is an economic powerhouse that you really have to see to appreciate it.

"With the population growth and the economic growth at the moment, they are unquestionably the engine of the future," he said.

"By 2022 over 550 million people in China will be considered middle class and this presents a huge opportunity for Ireland with our reputation for quality and authentic products from a clean environment."

SuperValu is Ireland's largest grocery retailer by market share according to Kantar Worldpanel, with Dunnes Stores in second.

Musgrave generated revenue of €3.7bn and a pre-tax profit of €52.8m from continuing operations last year. It also controls the Daybreak franchise, and the Dialprix chain in Spain.

Musgrave hopes to emulate retailers such as UK-based Waitrose, which exports branded goods around the world.

Family-owned Musgrave has developed a number of own-brand goods for SuperValu under its 'Signature Tastes' label.

Sunday Indo Business

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