​Woolworths to launch on Tmall with eCargo

Woolworths will be launching on Alibaba's Tmall with the help of eCargo that will help coordinate the retailer's inventory, packing, and distribution requirements.

Hong Kong-based e-commerce technology provider eCargo has won a contract with Australian retail giant Woolworths to build and manage the retailer's storefront on Alibaba's Tmall, China's largest online shopping business.

Under the contract, eCargo will coordinate Woolworths' inventory, packing, and distribution requirements; advise on brand entry strategy; and undertake a range of digital and social marketing activities.

This contract will mark Woolworths' entry into the Chinese food and grocery market, according to ECG executive chairman John Lau.

Lau said the opportunity to work with Woolworths marks a milestone for eCargo too, as it will be its entry into the food and groceries market.

"We believe the food and groceries segment will experience huge growth in the coming years between Australia and China, as cross-border trade restrictions ease and the China-Australia FTA (free trade agreement) takes effect."

Since listing on ASX in 2014, eCargo claimed it has helped other international brands to China including Karen Millen, Jeanswest Australia, La Perla, and Tom Tailor.

Earlier in the year, Woolworths reported during the 2015 financial year results that it spent AU$425.9 million on its total transformation project, which included AU$199.1 million before tax on resources and professional services costs associated with business transformation programs, accelerated depreciation of assets no longer in use, and inventory provisioning due to changes in strategy.

Another AU$43 million was put towards redundancy costs, which Woolworths said was primarily associated with restructuring initiatives across corporate-wide support functions, supply chain, and non-customer facing positions.

Woolworths also began its three year journey on its Australian Super Customer 1st strategy during the year. Earlier in May, the company said it was going to leverage customer data sets to make decisions across its entire business as part of a new three-year strategy. It believed that putting focus on what its customers would help restore sales momentum.