Overseas opportunities for your small business
China’s rising middle class and increasing levels of disposable income flowing through its economy are driving new levels of online sales and savvy Australian businesses are preparing strategies to capitalise on this.
Australian products are often in high demand across Asia due to their authenticity, high quality and the market’s positive perception of Australian brands and producers. As the market grows and new technologies improve the channels available for Australian brands to connect with Chinese customers, it seems as though there has never been a better time for Aussie retailers to make international eCommerce plans.
While traditional markets such as North America and Europe are still lucrative for online sellers, the size of the Asia Pacific online retail market is growing rapidly. According to a forecast from research and advisory firm Forrester in 2016, the Asia Pacific eCommerce market will reach US$1.4 trillion by 2020; the size of this market will nearly double within only a few years from its current size of over US$733 billion. The rate of growth is extreme and the number of potential new customers for businesses operating in this space is undeniably large.
Traditionally, tariffs on imports have hampered efforts of Australian exporters trying to break into foreign markets. But with Australia’s recent free trade agreements with China, Korea and Japan, these price barriers are starting to break down.
It may come as no surprise that the China-Australia Free Trade Agreement (ChAFTA) which came into force on 20 December 2015 has the potential to unlock significant opportunities for Australian industries, especially considering that China is Australia’s largest export market for both goods and services. Further, the China region is a growing source of foreign investment in Australia.
But cost to market isn’t the only barrier that Australian retailers face. There are also the nitty gritty details of international logistics and marketing to this new customer audience.
When deciding to set up an eCommerce business for the Chinese market, many business-owners may find that translating an online store into several different languages and relying on organic reach is a costly and difficult way to access foreign markets.
Instead, more Australian businesses are gaining access to millions of customers in foreign markets through online marketplaces that are already operating in these regions with existing audiences and relevant technological infrastructure.
While eBay is possibly one of the most popular selling platforms in countries such as the USA and Australia, it’s a different story in many Asian countries which have their own localised versions of the online marketplace.
These marketplaces are often specific to one national context and as a result are extremely successful.
For most Australian businesses, managing accounts on several different marketplaces in several different languages is simply out of the question. The time and cost to keep up-to-date with the work involved is overwhelming for many, so it makes sense for business owners to find partners to help them access those markets.
Getting into China
When it comes to selling products to Chinese consumers online, Tmall is a good option. This online B2C marketplace is owned by Alibaba Group which was listed by research group Kantar as the second most valuable global retail brand in 2016—the group had a brand value of US$49.30 billion, only ranking it behind Amazon which was ranked at the top of a list of 25 retail groups with a value of US$99 billion.
Tmall itself is one of the Alibaba Group’s most successful ventures; in 2014 the marketplace held just over 61% of the market share of China’s B2C online shopping websites. Further, in 2016 Tmall’s global product categories grew by 50% to 3,700 shopping categories with more than 14,500 international brands from 63 countries and regions now available for purchase via the platform.
Health, beauty, and wellness products from Australia and New Zealand are particularly popular on the eCommerce site. SWISSE vitamins and supplements from Australia, and Manuka honey products from New Zealand are amongst some of the site’s biggest sellers.
Some large Australian businesses such as Thursday Plantation, A2, and others are already selling products directly into China via Australia Post’s Tmall managed store.
eBay made easy
Whether they are in Shanghai, Sydney or Seattle, eBay is always a great place to find online customers around the world. With approximately 165 million users, the site hosted around a billion listings totalling US$19 billion worth of transactions during Q3 of 2016 alone. eBay is a vital market place for any retailer.
For local retailers with an interest in selling online via eBay, Australia Post offers flat rates on parcels up to 5kg, so they are able to provide standardised shipping costs for their customers as well as being able to better project their business’ operating costs.
These eCommerce traders can also print labels from within their eBay accounts, so they can simply drop their parcels in any street posting box around Australia or at a Post Office. There are also discounts available for eBay users that send more than five parcels per week.
Most small business owners would likely prefer to spend more time developing and producing their products, than dealing with eCommerce platforms and logistics. For Australian online retailers looking for an end-to-end solution to access overseas markets, Australia Post can help to nurture business growth by finding customers and managing online sales.
Visit auspost.com.au/smallbusiness to find out how Australia Post could help your business sell overseas.