Australian SMEs who previously found it too difficult or costly to export to China now sell to Chinese consumers due to advances in cross-border e-Commerce.
The method allows businesses to leverage the reputation and reach of established e-marketplaces in China instead of entering China alone, said David Landers, general manager of East Asian growth markets at Austrade, at the China Export Forum in Sydney.
“It’s a new, fast-growing way to leverage the presence of Chinese e-Commerce platforms, Mr Landers said.
“It can be a huge challenge for a business in Australia to drive traffic to their own stand alone website or independent marketplace.”
Consumers in China buy a range of imported products online, including food, wine, cosmetics, clothes, health supplements, and lifestyle products.
It’s predicted nearly 36 million Chinese shoppers will spend $10.7 billion on products from Australian retailers, according to PayPal.
There is great potential for businesses that want to begin or increase exports to China via e-Commerce platforms. However, many businesses make these common mistakes that hinder their success in China.
1. Ignoring growth in mobile
Shopping on smartphones and tablets is popular in China, with internet giant Alibaba’s mobile shopping sector surpassing its PC shopping sector last financial year, said Maggie Zhou vice general manager of the cross-border B2C division at Alibaba.
“In China, now, mobile shopping has grown rapidly,” she said. “In those rural areas, mobile shopping is bigger than for those people in first tier cities.”
She put this down to a number of rural residents without computers in their home but own a smartphone.
Businesses with existing websites for Chinese consumers need to ensure their site is mobile-friendly to cater to the country’s 800 million smartphone.
2. Failing to capitalise on Australia’s existing image
The growing number of middle-income earners in China have different preferences, expectations and purchasing behaviours compared to those in Australia and the rest of the world.
“Middle class people - they will (have) huge purchasing power. They need the high-quality, authentic and the green products from overseas. I think it’s an opportunity for Australia,” said Zhou.
Consumers in China value product authenticity, food safety, gift-giving, natural items, as well as celebrity endorsements.
3. Homogenising Chinese consumers
Many exporters homogenise Chinese shoppers, instead of understanding the different demographics and consumer groups within China, said Vivien Astl head of e-Commerce operations at Australia Post.
“Take the time to customise and localise, it’s not a one-size-fits-all market.”
Some brands choose to only target consumers in the first tier cities of Beijing, Shanghai and Guangzhou when they attempt to enter to China. However, this overlooks the value and number of shoppers outside of these traditional centres.
Rural shoppers are the most adventurous consumers in China with 43 per cent enjoying the experience of trying new products, compared to the national average of 31 per cent, found iConsumer in 2015.
Rural consumers reported the most enjoyment from shopping online, even more so than their counterparts in first and second tier cities.
4. Making assumptions
Exporters should work backwards from research to design an effective China strategy based on facts instead of assumptions, said Benjamin Sun director of Think China.
“Before you enter the market, you need entrance market research. But especially if you are already in the market, you need to be aware of your competitors.”
Businesses should investigate competitor product offerings, pricings and digital strategies to learn from their strengths and weaknesses.
5. Failing to build your brand
Despite the perks of joining e-Commerce marketplaces, this can’t be your only strategy if you want to succeed in China, said Sun.
“It’s actually really hard for you to do your branding through e-Commerce platform only. You should have social media plus your own Chinese website with e-Commerce platform together.”
Businesses already targeting China should check their website is accessible from China as it is “very common” for people to overlook the challenges of China’s Internet service.
“Make sure your website loads in China because if you spend let’s say $20,000 to develop a good website and translating in a wonderful way you want the website to be loading perfectly.”
He recommended businesses to host their website in China or Hong Kong to speed up access to the platform for Chinese users. Hosting from mainland China will require an ICP recordal, a state-issued permit which allows the site to operate legally. In a country where counterfeit products and web security breaches are common, hosting from China with a state-issued permit will prove authenticity and help gain consumer trust.
The growing popularity of cross-border e-Commerce
With the purchase of import goods via e-Commerce set to become mainstream in China, Australian businesses need to consider how to make the most of the next development in online retail, said Zhou.
“If the last decade, we say, was the golden era for domestic China e-Commerce, the next decade will be the diamond era for cross-border e-Commerce.”
To learn more about cross-border e-Commerce and other cutting-edge marketing strategies to target the Chinese market contact digital marketing experts, Think China. www.thinkchina.com.au