Chemist Warehouse, Australia's biggest pharmacy chain based in Melbourne, opened its first physical store in China in October. The company was one of the exhibitors at last year's China International Import Expo (CIIE) in Shanghai. The brick-and-mortar store of Chemist Warehouse is located in Zhengzhou City, central China's Henan Province. In its first four days, the store offered discounts and witnessed an unexpected influx of customers.

"We expected there would be many customers but didn't expect so many," said Ma Yitao, managing director of the newly-opened Chemist Warehouse in Zhengzhou City, adding "The top-selling products are those from mother and baby care category, followed by healthcare products and cosmetics." 

Chemist Warehouse is a renowned pharmacy chain in Australia. In 2015, it first appeared on Alibaba's T-mall, China's e-commerce giant, and has seen high sales volume on T-mall for three consecutive years. Many customers at the offline store are regular online shoppers. 

The store opened in a cross-border shopping center in a bonded area in Zhengzhou City. The products are all from Australia. With regular discounts, the price is almost the same as it is "down under." Free of customs duties, shoppers still have to pay value-added and consumption taxes, both at a 30-percent discount. 

As one checks out, it is compulsory to show an ID card, then pay and wait for about two to ten minutes for customs clearance, after the clearances one can take the goods and go. 

So why did the company choose Zhengzhou to open an offline market in China? Nancy Jian, CEO of Chemist Warehouse explained: "Zhengzhou is the only city that has been selected to pilot this project so we are very proud and privileged to lead the cross border e-commerce from online to offline to give our consumers a different experience." 

In fact, at the 2018 CIIE, Chemist Warehouse signed a cooperation agreement with Henan Bonded Group. It's the only group in China that offers an innovative policy to allow cross-border e-commerce companies to open a physical store in its bonded area. 

"The business of an O2O offline self-pick-up store is only available in our bonded area in Zhengzhou. We provide a non-traditional cross-border shopping experience. In the past, online cross-border stores could only showcase products in physical stores. Now they can also sell their products offline," said Xu Chaofeng, executive director of Zhong Da Men Internet Technology Company owned by Henan Bonded Group.                                        

Henan Bonded Group also offers many favorable policies to support their cross-border business partners, reducing their warehouse and store rental costs.  

Jian is optimistic about their offline market in China."Because it is a pilot project, one thing that I've learned about China is they will get better, eventually, it only takes time. In China, I believe, in the next 12 months we will see very big significant changes." 

Xu is also looking forward to this year's import expo in China. "Many overseas companies say they hope to sign contracts with us at the upcoming import expo. We hope to bring more overseas products to China through the O2O business model."