Melbourne-headquartered internet and retail chemist, Chemist Warehouse has signed an agreement with Tmall, a subsidiary of China's second largest e-commerce company, AliBaba.

Chemist Warehouse will establish a new entity to manage the China e-commerce arm of its business, which will be headquartered in Melbourne.

The Chemist Warehouse agreement will enable the company to commence selling products on Alibaba's Tmall site.  Tmall Global is a business to consumer site for retailers selling directly to consumers in China.

As a result of the agreement, Chemist Warehouse is projecting sales of A$22 million in the first year and A$88 million the following year.  The company expects to create 50 new jobs in Melbourne to service these increased sales.  The number of jobs will continue to rise in line with the projected rise in sales.

Chemist Warehouse is part of the My Chemist/Chemist Warehouse Group which has more than 300 stores throughout Australia employing just under 11,000 people. Just under half of these stores are located in Victoria.

China's online retail economy is booming and is already larger than that of the United States with increasing demand for high-quality products.

AliBaba is one of the world's largest internet companies, with annual revenues of over A$10 billion and a market capitalization estimated at over A$200 billion.  It employs over 34,000 people and is headquartered in Hangzhou, Zhejiang, China.    

The Victorian Government has provided advice and guidance on the e-commerce sector and production selection to Chemist Warehouse in the lead up to this announcement.

The Victorian Government recently partnered with Austrade in delivering an e-commerce briefing in Melbourne which involved four of the largest e-commerce platforms including Alibaba.