Herbaland, a Richmond-based nutritional gummy producer, is entering the Chinese market by partnering with a subsidiary of Alibaba.
Tmall Global, owned by Alibaba – Amazon’s primary competitor, is dedicated to cross-border e-commerce. In 2018, Tmall Global and Tmall domestic were reported to reach 500 million users and control a 55% stake in China’s business-to-customer e-commerce market.
“They are really really dominating the (Chinese) market; very user-friendly. It’s definitely a good platform to showcase our amazing products,” Aisha Yang, co-founder of Herbaland, told the Richmond News.
The partnership was spurred in part by growth in the Asian gummy market, according to the company. A 2017 study showed that the Asia-Pacific gummy vitamin market will grow by 5.2% annually over the next eight years, reaching $4.17 billion by 2025.
Yang hopes that by working with the e-commerce giant, her Richmond-produced gummies will be easily accessible in a market that has the largest number of online consumers in the world.
“When I was in the subway (in China), everybody was watching their phones and doing their online shopping. That’s become their daily routine. We definitely want to be part of that routine,” said Yang.
When customers make orders online, Herbaland can ship its products to Tmall’s warehouse in California, who will then take care of the order and ship it to China.
The company can also directly ship its products to “free trade zones” in China, set up by the Chinese government, where goods moving through are not subject to the usual taxes.
“Shipping won’t be the major issue overall. It’s very convenient, and shipping costs are being driven down by competition nowadays,” said Yang.
She added that the prices of their products in the Chinese market are widely accepted even though they are a bit higher due to the shipping cost.
“The customers know the products will benefit them. They just want to enjoy the products as soon as possible,” said Yang.
Yang said the company has seen an increase in sales since it launched its products on Tmall last November, including the new Vegan Collagen Booster Gummies, which was exclusively sold on Tmall Global in the Chinese market.
“Globally, all the countries want to do business in China, not only Canada. That also means a lot of competition. Our biggest selling point is our Canadian high quality," said Yang, adding many of their ingredients are sourced locally in Richmond.
“Our goal is to become the most recognized brand in the Chinese market.”
Herbaland currently exports its products to 35 countries.