1Online China consumer spending is expected toreach $6.18 trillion sometime this year, up from$2.03 trillion in 2010. The Chinese e-commerceconsumer market is growing at nearly 50 per centeach year. There are now more than 668 million Internet-connected consumers and more than 596 million mobile Internet users.

For Australian businesses, Chinese consumers’emerging online spending behaviour presents a rare opportunity to sell directly into the largest growing e-commerce market in the world.

Paul Greenberg, Chairman of the National Online Retailers Association and founder of Deals Direct says: “The e-commerce opportunity for Australian retailers in China is the new El Dorado. “There’s been an explosion of China e-commerce sites over the last decade. Popular online shopping sites such as Tao Bao, Yihaodian, Jing Dong, TMall and Suning are delivering shopping packages to consumers over China in ever-increasing numbers; bypassing traffic with deliveries, carrying their loads in compactly designed electric scooters.”

Outside apartment buildings in many Chinese cities, one can see these logistics vehicles on two wheels gather together as they disperse packages to local residents. This highly competitive business has as its leaders Jingdong and the Alibaba-owned T Mall. According to Wang Xiao, IT Director at Simba Innovation, “What gives Jingdong a competitive advantage is its sophisticated logistics and warehouse network near many major Chinese cities. Jingdong promises a same day delivery, a promise on which they are able to deliver.”

Wang adds: “The customers also get a great, convenient experience”. TMall, backed by the Alibaba-group, is high-profile, marketed as a huge online shopping mall with many different products where designer brand retailers license third-parties to sell their wares. Shoppers are then assured of the authenticity of the product, essential in China where “fake” goods of all description are easy to come by.

Australian supermarkets chains IGA and Woolworths have taken note of these consumer-buying trends and now distribute their products directly into China via e-commerce sites. Woolworths recently struck a deal with TMall Global, the international arm of TMall. Through this channel, Woolworths are focussing on specialized products such as vitamins, milk powder as well as Woolworth’s own branded products.

Similarly, Metcash, Australia’s largest food and liquor wholesaler and the company who own IGA, Cellarbrations and Bottle-O, launched their own shop front on TMall Global promoting Australian products. TMall Global is much smaller than TMall, with only 10-15% of the overall consumer traffic. Interestingly, it is the high-wealth Chinese customers who are purchasing from this site in order to find genuine imported products. Chinese consumers have an insatiable appetite for all things Australian; products labelled “made in Australia” with the government-licensed kangaroo logo have become strong identifiers for Chinese shoppers.

2Combine this with Australia’s reputation for natural and clean food products, natural plant and animal body beauty and health products and it’s easy to see why Australian products resonate strongly with the Chinese as a consequence of China’s plethora of on-going severe food safety and air pollution issues.

Australia’s reputation has led to an exponential increase in Chinese consumers’ demand for Australian imported food products, and points to the opportunities ahead for Australian businesses willing to move into ecommerce.

Milk powder, fresh milk, Blackmore’s vitamins and meat are some of the hot items for Chinese imports. According to Greenberg: “…not nearly enough retailers are harnessing the flat world. Australia’s advantage is precisely the types of products that well-heeled Chinese consumers are now looking for.”

Of smaller Australian e-retailers, Greenberg points to Black Milk, a fashion apparel company who specialize in quirky designs from iconic shows like Dr Who and Star Wars. “Australian fashion retailing is doing well in China. You’ve got a business in South Australia selling Emu Oil; others selling merino wool, UGG boots, and even lavender bears from Tasmania. There’s no question in my mind that there are literally hundreds of mumprenteneurs utilizing Chinese e-commerce. We’re really seeing that; we’ve got proof points now”.

Greenberg advises Australian businesses: “If I was thinking of getting into business again, I would find products that are unique, aspirational and have a point of difference. The Chinese are looking for unique and hand made products and there are plenty of margins in that range”. The challenge for Australian businesses is to understand Chinese consumer needs and online shopping channels. Chinese consumers are becoming accustomed to fast service and delivery via their mobile device apps.

Location-based service and delivery is a fast-growing online sector and Chinese consumers, particularly the younger, female generations are willing to pay for the convenience with service location apps like 58 DAO JIA providing housekeeping, child-rearing and beauty services to their homes.

Chinese women will increasingly need to outsource traditionally female roles, as their rising education levels and participation in the workforce means they are time-poor and yet enjoy the convenience of online shopping. According to the Voice of China, Beijing and Shanghai-based Chinese women aged 30-39 are now the driving force of online shopping.

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China is entering the “she-economy” with a growing need for health and well-being. With 850 million monthly active users, social media has become the most important function of mobile phones in China. And WeChat is the most popular app in China with more than 650 million monthly users, globally. As ubiquitous as Facebook, Wechat allows users to create shops and sell within their social circles or by creating an official account. Thus the rise of entrepreneurial Chinese students purchasing tins of infant formula in Australia and on-selling via their Wechat circles in China.

Tencent, the owner of Wechat is speeding up their expansion of Wechat wallet overseas. Wechat’s wallet function links debit and credit cards allowing its users to pay via storing money or transferring money to other Wechat users. Wechat users are now able to pay for electricity, food, airtime or wherever a retailer has a QR code that supports the SnapScan mobile payment platform. Users can now scan their Wechat QR codes in China at shops, to pay for taxi fares and many other services. Both Alipay and Wechat wallets have promoted their services in hot Chinese tourist destinations like Japan and Korea, allowing their users to pay for goods via their apps. WeChat Wallet is now available to be used in stores in 20 countries.

Yet many Australian retailers are still being put off due to the difficulties of market entry. “With the introduction of Alibaba’s Alipay wallet and the advancement of many forms of online payment systems” Greenberg says, “have been a real game changer”.

“I would argue that factory to the customer’s front door is the new reality. The discount market is not doing very well. There is a new sensibiliyt in Australia that customers want quality and brand”.