China’s four largest e-commerce marketplaces recently met in Sydney with the goal of increasing the volume of exports of Australian products to the growing number of online consumers in China.
Alibaba, JD Worldwide, VIP.com and Yihaodian, attended the event with Australian business leaders following the signing of the China-Australia Free Trade Agreement (ChAFTA) in June.
Maggie Zhou from Alibaba Group’s cross border division pointed out that Australia is ranked fifth most popular shopping destination by online shoppers in China.
Furthermore, demand for premium consumer goods is growing rapidly among the country’s middle class, which is growing rapidly too.
“eCommerce is now not a business model, it’s a lifestyle.”
David Landers from Austrade highlighted that e-commerce is the ideal platform for businesses to reach deeper into the Chinese market.
“Australia’s reputation for clean, safe and premium products sits well with Chinese consumers who are increasingly demanding the highest quality food and consumer goods for themselves and their families,” he remarked.
China’s online shopping industry is expected to generate USD$540.4 billion this year, up 25 per cent from last year, according to research from IBISWorld.
How should you do business in China?
The retailers emphasised the importance of mobile retail technology to make shopping more convenient for Chinese consumers.
JD Worldwide, the third largest internet company in the world by revenue, expects 60 per cent of its orders this year will be made on mobile devices, said director Tony Qiu.
“There’s a trend in China, actually moving from PC end to mobile end at the moment.”
Mobile technology is important for customer loyalty, said Hillary Wang, director of overseas business at fashion and accessory flash sale website VIP.com.
“People who use apps…have a higher frequency of use.”
Although some businesses choose to only target tier one cities such as Beijing, Shanghai and Guangzhou, Benjamin Sun said businesses shouldn’t neglect second and third tier cities which also have high internet penetration rates.
“Some second tier cities perform very well on particular categories.”
First tier cities make up 13 per cent of China’s 630 million internet users, whereas second and third tier cities have a combined total of 41 per cent of China’s internet users.
JD is the third largest internet company in the world by revenue, amassing $18.5 billion in revenue in 2014. Alibaba has 334 million active buyers and shipped 278 million orders, equating to sales of over $9 billion, on Singles’ Day in 2014.
Alibaba’s consumer to consumer e-marketplace Taobao has the highest penetration of e-marketplaces in China with about 87 per cent of the country’s online shoppers visiting the in 2014. Alibaba’s Tmall only permits verified stores to sell on its site to ensure product authenticity and quality.
Grocery retailer Yihaodian carries numerous Australian brands including Leggos, Devondale, Jacob’s Creek, and A2.