Ask a Retailer – Premium Australia Foods | Part 2: China’s E-Commerce Landscape – Insider Tips for Success

September 16, 2014

Marketplaces Laura Lane By Laura Lane

With more consumers, competition and channels, e-commerce is only growing more complicated and overwhelming. Sometimes, all you want is a frank conversation with someone in a similar position to ask them for advice.

Welcome to that conversation.

Our Ask a Retailer blog series shares insights from e-commerce retailers across various verticals.

This post is the second instalment featuring Christopher Morley from Premium Australia Foods, a successful export e-commerce company that helps Australian food retailers and manufacturers sell internationally. Armed with more than 10 years in the industry, Christopher brings a unique perspective to the intricacies of cross-border trade and the Chinese online market.

Missed part one of our chat with Christopher? Catch up here.

Chris Morley

What do Australian retailers need to know about Chinese consumers (shopping behaviours, psychology, etc.)?

The Chinese consumer shops differently to Australians when it comes to food. Typically they frequent brick-and-mortar supermarkets less and have lower cart value. This is because of smaller family sizes and more reliance on physical market stalls. Online food sales are taking off at a rate far greater than what we see in Australia. Typically, wealthier consumers don’t trust Chinese-made food and prefer food made overseas. Often this food can only be bought online, so more and more consumers are visiting the likes of Tmall to purchase their groceries.

The Chinese consumer is, in our experience, keen to try new things. However, because of the many food scares that have taken place over the past few years, they are also wary of counterfeit goods. Items that are seen to be similar to what we enjoy here in Australia and are packaged as they would be here, are seen as trustworthy and a status symbol.

Many Chinese see foreign-made goods as luxury items, particularly food. When presenting items in China, it’s important to focus on what makes the product special.

Something I’ve seen in Australian e-commerce, when looking at the distance between us and US e-commerce, is that the online communities deemed to be behind in terms of maturity often learn from the mistakes of the leader. Therefore, I think many Australian online sellers have looked at the US market and learned from mistakes made there and avoided them. I see this in China as well. While the Chinese market is behind in terms of maturity, they have learned quickly and have the world’s online sellers to learn from. For instance, email isn’t as popular in China – live chat and SMS are far more popular for buyer-seller communication. These are far more rapid and personal forms of engagement.

According to Forrester Research, more than 400 million Chinese consumers now have smartphones.1 Does the rise of m-commerce affect your strategy?

Mobile image
Mobile commerce is booming. The mobile phone is a permanent accessory of every Chinese citizen, and they’re very adept at buying from their phone, more so than Australians. While their e-commerce maturity may be behind Australians in terms of acceptance and infiltration, their m-commerce is leading the way globally. It’s almost as if the Chinese consumer skipped a stage of online buying, progressing quickly to the comfort and acceptance of m-commerce.

Checking the responsive design of all online aspects is vital. To not have a mobile-friendly site in China would be ridiculous, but the phone can also be used for scanning QR codes and taking photos/movies for social media. Both of these link back to our overall strategy.

 

What about social media?

Social media china 2With Facebook, Twitter and YouTube all banned in mainland China, we have a presence on WeChat, Weibo and Yukbo – the Chinese equivalents of the aforementioned social sites. These sites have significantly high user engagement and are growing at rapid rates.

One aspect of social media that’s been shocking to us is the influence of KOLs – key opinion leaders – essentially celebrities in China who mention products on their Weibo/WeChat accounts. These mentions heavily influence consumer purchasing. In Western media, celebrities don’t have anywhere near the level of influence they do in China.

Many of the same Western concepts about social media engagement ring true, such as trying to make the individual feel special and involved in something. A KOL is an absolute must for any business wanting to grow market share in China.

Does Premium Australia Foods have any strategies for Chinese holidays, such as Singles Day, Double 12 or Autumn Moon Festival?

We absolutely do have strategies for the Chinese holidays – especially the upcoming Singles Day, 11/11 – the biggest e-commerce sales day in the world. We’re also looking to bring many of our Australian holidays to China to help grow promotion opportunities, such as Australia Day, Christmas and even the Queen’s birthday feature in our marketing strategy.

By combining the Chinese and Australian calendars, we actually create new reasons for customers to come. I hope this will be an advantage for us in the next year or so.

Do you have any e-commerce best practices that you think might benefit other Australian retailers looking to sell internationally?

The use of m-commerce in China is, in my opinion, far superior than in Australia, in terms of consumer acceptance and business resource allocation. I think we can learn a fair bit from that, as it will be the future of buying. In Australia, there was significant debate about online versus offline and the use of phones in stores as a downside for Australian businesses. In China, it’s the complete opposite. Because of the emergence of online and the use of mobile phones, the trend of online to offline (020) commerce (attracting consumers online and then directing them to a physical store,  has emerged) – a more efficient and convenient retail model. This, too, is something we can learn from.

Christopher, we appreciate your sharing this insider glimpse of Premium Australia Foods and your insights into the Chinese market. We wish you and your company continued e-commerce success.

Blog post by Shani Flynn, Marketing Copywriter, APAC, ChannelAdvisor


[1] http://www.forrester.com/China+Online+Retail+Forecast+2013+To+2018/fulltext/-/E-RES109441


Chinese consumer ebook cover

Want to learn more about China’s shopping patterns? Check out our free eBook Understanding the Chinese Consumer.