When Australian exporters look north to Southeast Asia and a little further to China they can see huge opportunities. For any but the largest business with extensive resources, exporting to Asia can be a daunting prospect.
“China is no different to consumers across the world – they want to receive the product quickly from a trusted supplier at a very competitive rate,” says Kenny Chen, who heads up Australia Posts International Sales team.
Chen says that while the opportunity offered by China to Australia’s exporters is well-known, we shouldn’t overlook Southeast Asia because it has those two elements necessary for e-commerce export success – a growing middle class who are connected to technology which drives smartphone use and mobile shopping.
“If you look at Southeast Asia as a region, we’re talking about 640 million people and growing,” Chen says. “It is often considered as the next China from the e-commerce perspective.”
Exporters can leverage off Australia’s reputation as a supplier of natural, clean and green produce by exporting products like vitamins and supplements, dairy, food products, organic skincare, cosmetics. “The health and well-being side of things which is what is being sought after by a lot of people outside of Australia,” says Chen.
Access to China’s online marketplaces
China’s largest online marketplaces, Tmall Global and JD Worldwide, between them command 60 per cent of China’s business-to-consumer eCommerce. The size of these marketplaces make them a good platform to access the China market, particularly for small to medium sized Australian businesses.
Partnering with brands who already have an established presence can form a part of a business’s strategy to enter the market. For example, Australia Post’s Tmall marketplace sells many top Australian brands which have an existing presence in the China market. “Its marketing via brand association” says Chen “Selling a lesser known, entry level brand that’s a great product with a lot of potential amongst a big brand is a good tactic which should be considered in your strategy”.
Chinese eCommerce websites are different to those which Australian consumers are used to. Instead of the clean look and feel with lots of blank space, Chinese shoppers prefer a busy and crowded website with lots going on, says Chen.
Australia Post’s international team are a one-stop shop for small to medium businesses, building a virtual shopfront, taking care of order management, and providing a logistics and supply chain service to ensure the whole cross-border ecommerce ecosystem is taken care of.
“We make it simple for Australian merchants by having all this set up. Merchants can come to us and we give them a back-end order management system where you see the orders come through and it’s all in English,” says Chen.
“Basically, once the order comes through, the brand fulfils the order according to the customer’s needs, attach a packing slip that we provide through the system, and then just drop it off at the post office and we do the delivery for them.”
It’s also a lot cheaper for merchants than trying to set up their own shopfront in one of China’s online marketplaces. For instance, a business wanting to set up its own marketplace on Tmall Global would have to pay a minimum US$30,000 security deposit and annual fees of US$10,000 to US$15,000.
Australia Post’s marketplaces are ideal for small to medium businesses who are just starting to export to China. Larger businesses with more export experience might make more direct connections with the Chinese consumer but will still want logistics support.
An option for these businesses with higher volumes going to China is to use Sai Cheng Logistics International, a joint venture between Australia Post and China Post. Sai Cheng has 14 warehouses across eight Chinese cities to act as distribution hubs for Australian businesses.
Sai Cheng also exports from China to Australia, working with Australian companies who manufacture and produce some of their products offshore. These products aren’t just exported to Australia – they go all around the world. Australian surf wear brand Rip Curl ships products to 20 different countries via Sai Cheng.
Chen says as a government business enterprise, Australia Post has a commitment to supporting businesses locally and globally. “We want to create ecommerce solutions which make it easier for Australians to grow their businesses – whether that’s in Australia or overseas” he says.
While it is very focused on cross-border ecommerce, Australia Post is also investing into offline sales, opening ‘Australia Post China Direct’ in New South Wales and Victoria in 2018.
“We’re in a new era of retail, where online and offline retail work together to get the best outcome for consumers and merchants”.
“We do this because we see the online plus offline strategy is clearly important for brands to grow, navigate and have a sustainable future in international markets”, says Chen.