While brands from New Zealand, the US and other countries have traditionally dominated Australian shopping aisles, I saw a real opportunity to embrace the China-Australia Free Trade Agreement and (ChAFTA) and put my Australian owned and operated company, Slim Secrets, into the hands of China’s 1.4 billion population.
We had been operating in Australia for 10 years and were keen to expand into China, especially given China’s demand for Australian made products.
After participating in Australia Week in China earlier this year, I recognised a strong demand for Australian products. The feedback I received is that our authenticity, quality ingredients and manufacturing standards are desired attributes that the market is seeking. As no one can deny the sheer size of this market, in comparison to Australia, there is a real opportunity for Australian businesses in China.
We entered the Chinese market through several trading partners, and via one of the largest e-commerce platforms, VIP, which has over 170 million subscribers. While the result has been overwhelmingly positive, it didn’t come without its challenges, so here are my top tips for any Aussie business keen to infiltrate this overseas market.
1. Understand and adapt the business to cultural differences
This is easy to overlook in the chase of a business opportunity. However, China operates very differently and it’s important to adapt to their way of doing business. From business card traditions to accepting the pace of business. Business takes time, decisions take time – interactions are conducted very respectfully.
2. Acknowledge product preferences
Sizing and packaging is another factor to consider when entering the Chinese market. In my experience, the general population in China prefers more petite sizing for its food products and have stronger preferences for certain colours. While this doesn’t mean you necessarily need to add more SKUs to your business, it may be an element you incorporate into new product launches.
3. Get your pricing right
It can be easy to get caught up in the moment and accept first offers of pricing. However, with so many on and offline retailer platforms, pricing can vary significantly between them. You can literally destroy your brand through your pricing, so ensure you undertake your research and have consistent pricing across all selling platforms. Do not rush into these decisions.
4. Research preferences in tastes
It is important to invest time into understanding the tastes of the Chinese consumer. Like product preferences, this may not necessarily mean an overhaul of your product lines, but a consideration for future product innovations. In our experience, we found a strong preference for berry flavours in China, as opposed to richer flavours like salted caramel that are currently popular in Australia.
5. Get expert support
Transitioning into a new market is not easy and it pays to engage the expertise of professionals who understand the market and have helped other Australian businesses enter China. We engaged with a consulting and strategy organisation that has helped some of Australia’s leading brands move into the market. It means they have the insights into what works and what doesn’t, and what’s most relevant to ensure your efforts are highly efficient.
I encourage all Australian businesses who have ever entertained the idea of expanding into China, to take a leap and give it a go, as if successful, can reap rewards and give your business an international presence.
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