Australia’s farm and food sector exporters are still to fully wake up to the value of one of our most obvious trade advantages with China – Chinese Australians.
The marketing clout which more than 1 million locally-based Chinese can offer local food, clothing and cosmetics brands vying to be noticed in China is exceptional says John O’Loghlen, the Australia and New Zealand business development boss with Alibaba, the world’s biggest online commerce business.
The Chinese e-commerce and payment services giant expects internet-based shopping will see thousands, even millions, of small to medium sized Australian and NZ enterprises successfully going head to head with big business in export and domestic markets.
Food, and particularly fresh produce, are notable growth priorities on Alibaba’s “premium consumer” platforms Tmall.com and Tmall Global, and its new high-end Hema Fresh supermarkets in Shanghai and Beijing.
The future for Australian and NZ agricultural products is in brands
But Australian exporters must first become far more focused at developing and promoting branded products if they want real traction in China, according to Mr O’Loghlen.
Businesses probably also needed a 100-year market view if they wanted to survive rapid changes to retailing in the next 10 years, particularly in China’s online “parallel universe”.
Ambassadors with influence
“The Chinese population in Australia and NZ is the sort of ambassador network my colleagues in Europe or North America pine for,” he told the Farm Writers Association of NSW.
“Through their smartphones and social media posts, the Chinese here are significantly influencing the popularity and reputation of Australian products, brands and retailers.”
Last year Australia became the fourth biggest selling country with products offered on Alibaba’s multiple market platforms during China’s “singles day” global shopping festival on November 11.
Singles day generated about $23 billion in sales turnover for the e-commerce giant.
Mr O’Loghlen said companies such nutrition names Blackmores and Swisse, wine giant Penfolds, or retailers Woolworths and Chemist Warehouse, owed a much of their year-round online sales success in China to the “activity and vision” of Chinese contacts and representatives here in Australia.
These promoters included, or were complemented by, daigou shoppers who work or study in Australia and regularly buy selected goods to send back home.
After a 25 per cent rise in the number of Chinese living in Australia since the 1990s, an estimated 40,000 to 60,000 daigou personal shoppers now buy locally for family, friends, or even pre-school mothers’ networks, in China.
Even Alibaba founder, and China’s richest man, Jack Ma, was apparently surprised at the number of expatriate Chinese now living in Australia and capable of promoting exports to their former home country.
What’s Alibaba do?
Mr Ma established Alibaba’s buying and selling platform just 18 years ago.
By last year it had grown to include a money services venture bigger than Mastercard, plus cloud computing and data management services, a logistics business, a media and film operation, supermarkets, and shopping centre investments – all generating a total revenue of $9.3b.
Alibaba has also quickly grown into a valuable wholesale and direct-to-consumer channel for about 1300 Australian companies.
Dairy processors A2 and Murray Goulburn (Devondale), and grain product names SunRice, Freedom Foods and Uncle Toby’s among the most popular (behind infant formula and vitamins).
The success of Australian brands and products on Alibaba’s trading platforms prompted it to open a Melbourne office this year.
It is also ramping up initiatives to encourage big spenders to seek out even more local products – everything from Macka’s Angus beef from NSW to West Australian lobsters, Kathmandu active wear and Sydney’s BridgeClimb.
Australia and NZ should be about selling those branded products to the 1 million customers who are the best of our 580m shoppers.
“We (at Alibaba) really believe the future for Australian and NZ agricultural products is in brands which resonate with the quality and image consumers expect from this part of the world,” Mr O’Loghlen said.
“Australia and NZ should be about selling those branded products to the 1 million customers who are the best of our 580m shoppers.
“This opportunity in China is not about shipping frozen meat to the hot pot market in hundreds of contain loads.”
Australia had plenty of good farmers, but was generally “still not very good at branding” what it produced to meet the new retail era head on.
“Because if you don’t have a brand you will continue to commodity market yourselves into the sunset,” he said.
“You might be good at understanding commodity markets and managing arbitrage and basis spreads, but it won’t be enough.”
Emphasising his point, Mr O’Loghlen noted Alibaba handled “very few” products from South America where exporters focused on winning markets with low cost commodities shipped overseas in bulk.
He also warned against Australian exporters sending Australian food lines to China to be re-packed for distribution.
“Chinese consumers will feel they’ve been taken for a ride – they want a relationship with a product they know is sourced and prepared in Australia.”
Mr O’Loghlen urged producers and exporters to “get up, pull up your sleeves” and make a conscious effort to understand what Chinese consumers were thinking and doing.
“You need to be in China four or five times a year – and go much further than just a Hong Kong Sevens weekend.”