Diverse pathways to China’s consumers

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By Divya Skene

For Australian companies, operating in China is a recognised challenge.

In survey responses to the 2014, 2015 and 2016 editions of Australia’s International Business Survey (AIBS), respondents identified China, India and Indonesia as the hardest markets for Australian companies to do business in. These responses were submitted by Australian companies that were all successful – and on average experienced – in these markets.

Yet China’s growth and large consumer market will continue to drive Australian companies to pursue greater competiveness as they put forward products and services to meet evolving customer expectations.

New trade pathways into China, encompassing online and daigou distribution might assist with some of the cultural, language and business practice challenges identified by AIBS survey respondents operating in the market.

In recent years e-commerce platforms have seen strong adoption in China and this month Alibaba released 2016 data for cross-border ecommerce salesoccurring on its B2C online shopping site, Tmall Global.

Tmall Global now sells over 14,000 international brands to Chinese consumers. Around 1,300 Australian brands are represented on the Tmall platform.

In 2016 Australian products were the fifth biggest sellers on Tmall, after products from Japan, the United States, South Korea and Germany.

Top Australian brands transacting on the site include Chemist Warehouse, Swisse, Blackmores, NaturesWay, Devondale and Woolworths.

The highest selling international products are from the categories of ‘beauty and skincare’, ‘food and beverage’, and ‘baby and maternity’. The report notes the volume of transactions for ‘baby and maternity’ products on Tmall Global increased 24 times, over the past three years.

For Australian companies, Tmall represents just one of several online pathways that now exist for the delivery of their products to end consumers in China. These range from large Chinese e commerce platforms and other large Australian distributors that have direct relationships with Australian brands, through to mid-sized daigou firms, and individual daigou.

These digital networks are evolving spontaneously through demand and supply. Digital marketing agency Think China has recently mapped out an ‘export model’ to illustrate the ways in which each of the daigou and online groups might interact with each other in Australia, and how each sells into China.

Austrade

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