Post-millinials with ageing-anxiety and a penchant for luxury items hold the buying power, resulting in cross border trade growth into China.
Recent results from the 2017 Tmall Global Annual Consumers Report reveal that Australia has moved up one spot and is now number three on the list of countries selling cross border to China on Alibaba. This is due to a high demand for Australia’s nutrition supplements, baby products and milk powder for adults.
Japan nabbed top spot on the list, thanks to nappies, baby products, beauty and personal care products, while the US ranked number two with health food, supplements, baby products and bags the most popular categories. Germany and Korea ranked number four and five respectively, with similar categories (milk powder, supplements, beauty products and cosmetics) in high demand.
Cross border trade for Australian businesses into China is becoming increasingly popular, supported by marketplaces such as Tmall. The Alibaba Group opened its ANZ headquarters in Melbourne in 2017. “These incredible results for Australian merchants demonstrate that we are succeeding in our mission to make it easier for local businesses to do business anywhere,” said Maggie Zhou, Managing Director of Alibaba Group, Australia and New Zealand. “With 515 million annual active consumers now using our China retail marketplaces, the opportunity for Australian businesses remains enormous, and we are excited to be part of the China journey for even more local brands in 2018.”
Other interesting highlights from the report reveal that:
- Chinese post-millennials have become the main purchasing power for imported products.
- Content and emotional interaction is becoming a major factor in driving consumers’ decisions when buying imported products.
- Those born in the 1990s have now become the biggest spenders on imported products accounting for nearly 50 percent of total users and contributing to almost 40 percent of total sales.
- The three major motivations for those ages 18-27 buying imported products are the desire to try new things, aspiring to own luxury items and ageing anxiety.
- Between 2015 and 2017, the total number of Tmall Global customers has tripled, with more than 30 percent of them spending more on the platform.
In the fourth quarter of 2017, Tmall Global had a market share of 27.6 percent, making it the largest business to consumer e-commerce platform for imported products in China.
For those considering making the CBT leap into China, the figures look promising. The report estimated annual growth of 20 percent in transaction volume and a market scale of RMB620 billion by 2019, which shows there is much untapped potential in the market.