China's e-commerce player joins hands with Danish top supermarket chain

COPENHAGEN - China's cross-border e-commerce platform Kaola.com signed an agreement on Wednesday with Denmark's supermarket chain Irma on bringing Danish brands to the Chinese market through the platform.

According to the agreement, Irma, a subsidiary of Coop Denmark A/S, will in the beginning sell its own coffee, chocolate, marmalade, personal care products, and kids wear through Kaola, the e-commerce arm of internet giant NetEase.

The range will then gradually be extended, not least with ecological and eco-labeled groceries.

Coop's CEO Peter Hoegsted sees huge growth potential for high-quality Danish goods in China, especially among the middle-class consumers.

"Irma has a unique long history within ecological, quality assured and thoroughly controlled products. Therefore, it is in fact natural to make these products available to the Chinese consumers," Hoegsted told press at the signing ceremony at the group's headquarter in the suburb of Copenhagen.

Zhang Lei, chief executive officer of the Hangzhou-based Kaola, said her company wants to bring healthy organic and guaranteed products to China and sees great benefits in Irma's strong supply chain.

According to Zhang, Kaola owns the platform that operates the so-called Cross Border online stores that serve as a kind of virtual shopping center, where branded products from all over the world are sold directly to the Chinese customers from duty free stores with only 11 percent import duty.

"That's why Kaola will have a great advantage at pricing when compared with traditional stores," Zhang explained. She revealed that the Danish groceries from Irma will be available at Kaola from October on trial operation.

She said Kaola hopes to become the market leader in the field of organic products and non-allergenic children's clothes.

Jens Visholm, executive vice president of Coop, said the company expects a turnover of three-digit million Danish kroner within a foreseeable number of years through cooperation with Kaola.

"But with just under a billion potential customers -- and 27 million newborns annually -- the potential is much larger," he said, adding that the company is also testing the sales of some of Coop's private labels in China via other channels.

Founded in 1886 in Copenhagen, Irma is owned by Coop, the largest grocery company in Denmark that has a history of over 150 years.