Australian E-Commerce Looks to China for Global Growth

Chemist Warehouse is geared up to target its online Chinese consumer market this weekend, by supporting the Melbourne Chinese New Year 2017 Festival with a Tai Chi Masterclass Series in Southbank, to celebrate the Year of the Rooster.

In 2015, the pharmacy chain announced its plans to directly target the burgeoning demand for Australian complementary medicines in China, via its e-commerce website hosted on online retail giant Alibaba’s Tmall platform, projecting $88 million in sales in 2016 via the offering. in China.

chemist warehouse tmail china australia e-commerce

A part of Alibaba Group, Tmall Global is an e-commerce platform developed for international sellers to access Chinese consumers. China’s online shoppers interested in products from a specific country can go to an online country pavilion and access the country that way.

The strong demand for high quality Australian products in China was one of the factors which drove Swisse and Blackmores to be one of the highest performing Australian brands during Alibaba’s 11.11 Singles Day last year, China’s largest e-commerce shopping event.

The Pharmacy Guild of Australia, along with other Australian health and wellbeing suppliers, have been asked to attend China’s inaugural Health Product Expo in Qingdao in March this year, which is expected to attract over 60,000 visitors, 7,000 of which are industry buyers.

Through online shopping, Australian products have found a lucrative channel into the economic powerhouse of China.

Woolworths set up shop on Tmall Global a year ago, aiming to tap burgeoning Chinese consumer demand for Australian food and grocery products.

Australia’s largest supermarket retailer engaged with Chinese e-commerce company eCargo Holdings, to build and manage a Woolworths store front the Tmall platform, selling rougly 80 products including Woolworths’ Select and Woolworths Gold milk powder, Swisse vitamins and Devondale milk powder.

woolworths tmall china australia e-commerce
Woolworths Tmall Store

In April last year, one of our largest cosmetics online retailers Adore Beauty, backed by Woolworths (who have 25 percent stake in the company), announced its expansion into the Chinese market by selling its beauty products through Tmall.

Adore Beauty’s Tmall offering features 50 products, including six popular Australian brands that are currently not available in China, namely Lanolips, Alpha-H, ELEVEN, asap, evo and Skinstitut.

As of last year, cross border e-commerce in China now favours cosmetic imports, with the tax rate, if the purchase is above 100 yuan, now set at 32.9 percent, compared to 50 percent previously.

Kate Morris, founder of Adore Beauty says the Chinese market is an exciting and huge prospect for the company, especially in light of China’s demand for our high quality Australian products.

austrailan e-commerce china
Kate Morris, CEO of Adore Beauty

On a broader perspective, the company recently told us that 2017’s growth strategy is to expand its footprint globally, with China being an important part of that vision.

Adore Beauty now offers thousands of products to more than 150 countries and territories via its Borderfree e-commerce platform.

Which Australian products are most popular in China?

According to Startrack, the most popular Australian product categories in the Chinese market are supplements, dairy, honey, food, skincare and cosmetics, maternity and baby products.

Why sell to China?

“China’s middle class is booming. And they want to buy Australian products. Aussie produce is considered clean, green, authentic – Australian retailers are already meeting this growing demand,” says Startrack. 

According to the e-commerce and parcel delivery company, here are the six most important factors why China is such a great economic powerhouse for our e-commerce industry:

  • China’s middle class is booming
  • Chinese incomes are rising
  • Chinese consumers are shopping more than ever before
  • And most importantly, they want to buy Australian products

Wine is another up and coming e-commerce market fro Australia to coin in on, in the Chinese market. According to a new report that came out yesterday from the Australian wine industry, our local wine exports are seeing major gains in the Asian market due to changes in our free trade agreement with China.

If we go back three years, this time, Australia was losing major market share in the global wine industry, mainly to New Zealand and Chile. The reason being, these countries had a free trade agreement with China, but Australia did not.

Things have changed, and with that has come rapid revolution of the Australian wine market. In 2016 the value of our wine market grew by 7 percent to $2.2 billion, driven by big increases in bottled wine. Exports to China grew by 19 percent to $ 875 million, which overtook the US as our most important wine export market.

Online wine retailer Vinomofo looks set take advantage of this, with plans to launch into the Chinese market by 2018, which will follow its US launch planned for 2017.

Following the success of their launch in New Zealand six month ago, the company launched in Singapore last month, which it says will help set it up for its big US expansion, and then China.

“We’ll start in English, but we will then localise the content. We’ll have plenty of leanings from our Singapore launch, and learning how to operate in a different country. As a startup launching in a different country, we’re always aware that we have to assume that we’re pretty dumb and we have to learn hard about all these things,” Andre Eikmeier, Vinomofo’s co-founder and joint chief executive, told us at the Singapore launch.

 

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