China: Cashing in on demand for Australian products
Talk of the Asian Century in global economics is largely based on the way both China and India are building their cross-border alliances, improving indigenous wealth, and growing their GDP.
One of the most important economic and strategic partnerships supporting the concept of an Asian Century, is the one between Australia and China. In 2017, the two nations celebrated 45 years of bilateral ties. In recent times, the weakening of the relationship between the US and China has further strengthened Australia’s position.
The tariff war ensures that Australia is perfectly posed to sell more of its products in the People’s Republic of China. Particularly in-demand items such as cosmetics, beverages, health supplements and alcohol.
Population waiting to buy
China is working hard to improve the earning (and buying) potential of its population. These consumers represent fertile ground for Australian trade.
In fact, China’s middle-class population is set to exceed 600 million by 2022. This figure is 10 times larger than the whole of the UK, for example. And these Chinese consumers are traditionally discerning too, willing to pay for quality goods.
How to gain a trade foothold in China
China offers Australia’s small and medium sized companies an exciting marketplace. It’s also a great place to trial innovations and new product offerings.
How do you take advantage of that, particularly as the cultural divide between Australia and China is so significant?
Undoubtedly, it requires jumping on existing trade ties. These pre-formed commercial alliances offer the level of insight, information and on-the-ground contacts required to open doors. To recreate this sort of intel and links from scratch, in isolation, could take an infeasibly long time and considerable resources.
Let’s look at some of the opportunities in more detail.
Sell to Alibaba
Who is Alibaba? Possibly the biggest company that you have “never” heard of. It dominates the internet in China – think in terms of Facebook, eBay and Amazon in size but so far confined to 1.4 billion Chinese residents.
Traditionally, Alibaba has been a hard nut to crack for international companies due to the complex nature of its culture, legal systems and payments methodology, along with language and logistics.
Having the support of an existing Alibaba partner organisation is the key to unlocking huge sales potential.
Sell on Taobao
This Alibaba subsidiary is China’s largest digital retail marketplace. It’s hard for Australians to comprehend how central it is to life in China. The Chinese are likely to log on multiple times a day, to research and buy from vast amounts of products, but also for entertainment, advice and social interaction.
Getting your products on Taobao represents a substantial commercial advantage for Australia’s smaller enterprises, as it doesn’t necessarily entail investment in a physical presence in the country.
Sell to Tmall
Tmall Marketplace (also owned by Alibaba) gives Australian brands and retailers a trade foothold in China. It’s another digital shopping channel, showcasing higher end items for the more affluent Chinese consumers.
Knowing what sells and how best to use Tmall to promote products, can provide the perfect starting point.
Sell to Daigou
Daigou is another Chinese digital retail space, offering tailor-made opportunities for Australian companies via the platform’s comprehensive merchandising programs.
With the right introductions and support in establishing a working relationship with Daigou, firms get product advocacy with minimal risk and little initial financial outlay.
Sell to JD
JD is another Chinese online retail opportunity that rivals Tmall in its reach and portfolio. In the beginning of 2018, it signalled its intention to grow its market share in the Chinese consumer market with a $2.5 billion investment in its logistics arm. Australian products listed can benefit from this growth strategy, including sales in Indonesia.
Clearly the consumers and channels are there for ambitious Australian companies. All you need now is the right organisation to open the most appropriate door for you. Contact the expert facilitation specialists at AusMate today to learn more.