British Grocer Sainsbury Testing Selling Products in China

By Saabira Chaudhuri

LONDON--J Sainsbury PLC (SBRY.LN) has struck a deal with Alibaba Group Holding Ltd. (BABA) to trial selling ambient groceries in the country.

Sainsbury will sell products that have a long shelf like like tea, coffee, granola, biscuits and long-life milk through Alibaba's Tmall site, said a spokeswoman. It won't sell fresh food.

The trial comes as the Institute of Grocery Distribution has forecast that online grocery sales in China will triple in size between now and 2020, while overall grocery sales will rise from $1.12 trillion to $1.49 trillion during this period.

Nearly half of Chinese consumers are already buying groceries online, compared with just a quarter of global consumers, according to a Nielsen survey of 30,000 consumers.

China is a notoriously tough market for Western retailers to crack, with companies like Best Buy Co. (BBY), Metro AG (MEO.XE) and Revlon Inc. (REV) exiting the country, while Wal-Mart Stores Inc. has scaled back its ambitions there.

Sainsbury's arch-rival, Tesco PLC (TESO), in 2013 was forced to strike a joint venture for its China business, partnering with China Resources Enterprise Ltd.'s Vanguard unit, saying it hoped to benefit from CRE's understanding of Chinese consumers and infrastructure there. Marks & Spencer Group PLC (MKS.LN) earlier this year reshuffled its footprint in China and said it was evaluating potential local partners in the region.

Write to Saabira Chaudhuri at [e-mail]

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(END) Dow Jones Newswires

September 11, 2015 12:13 ET (16:13 GMT)

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