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China's Kaola.com to spend $5bn on more 'made in Japan' items

Japanese merchandise proves crucial in beating rivals Tmall and JD.com

Kaola.com sells merchandise from around the world to Chinese customers. The site's Japanese goods are proving especially popular.   © Getty Images

TOKYO -- NetEase, a major internet portal operator in China, plans to spend 500 billion yen ($4.68 billion) over the three years through 2020 to bring more Japanese products to Kaola.com. 

Japanese products have been driving the site's growth, with their sales ranked first on Kaola.

The website is China's No. 1 cross-border shopping site, controlling 25.8% of the market, more than Alibaba Group Holding's Tmall Global or JD.com's JD Worldwide, according to iiMedia Research.

NetEase's entire e-commerce net revenues came to 11.6 billion yuan ($1.83 billion) in 2017. Kaola generated the majority of sales.

Since its launch in 2015, Kaola has been selling a range of Japanese products, such as disposable diapers from Unicharm and Kao, cosmetics from Kose, and instant noodle products from Toyo Suisan Kaisha. Now more fashion and sports items will be added to the lineup.

NetEase's Japan unit procures products that appeal to Chinese consumers. Keiko Okamura, who heads the operation, is keen to "deliver Japanese trends to Chinese consumers ahead of rival operators."

Keiko Okamura, NetEase's Japan chief representative

However, a hurdle remains, one that all Chinese shopping sites face. In February, the China Consumers Association, based in Beijing, said several Kaola-sold products labeled as being from Estee Lauder, a U.S. skin care and cosmetics maker, were fakes.   

"We will continue expanding direct strategic cooperation with foreign brands," Okamura said.

NetEase is also working to respond more swiftly and satisfactorily to customer inquiries and complaints, and is planning to increase the number of call center workers, according to Okamura.

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