ANZ food, travel brands gain ground with Chinese online shoppers

Food items and baby products including formula are among the most popular items, according to Mintel research.

Devondale milk powder on sale on the Tmall platform, with a Kellogg free gift.
Devondale milk powder on sale on the Tmall platform, with a Kellogg free gift.

Australia and New Zealand food brands are making inroads into the mammoth Chinese ecommerce market, with one out of three Chinese online consumers who shopped for imported goods between June and November last year buying food products from these two countries.

Those statistics come from a Mintel report released in conjunction with the market researchers 'Big Conversation' event in Sydney yesterday. According to the report, 24 percent of Chinese consumers who shopped for food online bought from Australia, while 23 percent bought from New Zealand. The latter is a top source for baby food and baby products, taking a 22 percent share among Chinese consumers who shopped for such imported products (Australia was second at 20 percent).

Food items bought by Chinese consumers, by region
Source: Insights into China, Mintel

Made in Australia and New Zealand

Superior product quality and the reputation enjoyed by both countries as producers of healthy food made from natural ingredients are the main draws for Chinese consumers, who have been traumatised by past food-safety scandals.

However, Laurel Gu, research director at Mintel, told Campaign Asia-Pacific that the food-safety factor alone is not enough to drive preference for Chinese consumers shopping for baby products. Citing Mintel's Infant Milk Formula - China report, she said parents are discerning toward the "performance" aspects of the products, such as claims of nutrients that help brain development.

Baby food and products bought by Chinese consumers, by region
Source: Insights into China, Mintel

Brands should encourage consumers to shop through certified channels like authorised physical stores or official online retailers, said Gu. "ANZ brands will also need to ensure consistent pricing across markets so consumers won't need to purchase through channels like daigou [literally translated as "buying on behalf of"], to ward off any worries about product authenticity," Gu said.

The appetite for online shopping among Chinese consumers is phenomenal: 73 percent bought imported products online from domestic shopping sites in the past six months, compared with 56 percent who purchased the items in-store in mainland China.

As a sign of the burgeoning appeal of Chinese ecommerce for the Australian brands, Alibaba opened an office in Melbourne last month to support 1,300 Australian and 400 New Zealand businesses selling on its Tmall and Tmall Global platforms. The company also announced that it is working with Australia Post and Blackmores to combat food fraud by using blockchain. 

Meanwhile, the Mintel report underlines the waning influence of the Chinese haitao market (cross-border ecommerce trade) with more foreign brands making their marks in China at either bricks-and-mortar stores or domestic online shopping websites. Seventy-three percent of Chinese consumers buy from domestic shopping websites, compared with 27 percent from overseas shopping websites. Australian brands that have established their presence on Tmall include pharmacy chain Chemist Warehouse, Blackmores and grocery chain Woolworths.  

Gu advised Australian and New Zealand venturing into the Chinese online market to incorporate two cornerstones that define Chinese ecommerce success: fast delivery service and third-party payment systems.

Alcohol and tourism

Besides the food categories, Chinese consumers' taste for products from Australia and New Zealand extends to alcohol and travel. Eighteen percent of Chinese consumers who have bought imported products purchased alcoholic drinks online from Australia; while 16 percent of the top online products purchased from New Zealand were alcohol. On travel, 24 percent of Chinese consumers have visited Australia and New Zealand, while 30 percent said they had plans to visit the region in the next 12 months (until August 2017).

Gu said increasing outbound travel to Australia and New Zealand puts brands from these two countries in a sweet spot because it can help build brand awareness. She added that China's high outflow of students and immigrants to these two countries also plays a part in this regard.

"Chinese consumers residing in Australiasia tend to be equipped with better knowledge and experiences with the products and shopping channels since they have lived there for a good amount of time," said Gu. "As such, they are often looked upon as credible sources by others. 

 

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