Forget Amazon, here are four Chinese e-commerce businesses with their eyes on Australia
Wednesday, November 29, 2017/
As shoppers stare down the end of 2017, three of the biggest players in China’s digital retail space are executing long-term strategies in Australia, while others have their sights set on capturing Chinese shoppers arriving in Australia in search of locally made products.
Here are four operators that could present big opportunities for local SMEs wanting to connect with the Chinese market — and what you need to know about the plans they already have underway here.
Global revenue: $US23 billion ($30.28 billion) in 2017.
Founded by: Jack Ma.
Australian operations: Alibaba’s Tmall sales platform has been a selling opportunity for local brands like vitamins producer Blackmores for years, but it wasn’t until 2017 that a more formal long-term relationship was established between the e-commerce giant and the Australian market, when Prime Minister Malcolm Turnbull signed a commitment with Alibaba founder Jack Ma to work together to bring more local sellers onto the platform.
At the time, Australia was in the top five nations selling through Alibaba’s platforms. In February, the company launched an Australian and New Zealand headquarters in Melbourne, with local operations headed up by Maggie Zhou, who has been with the company for more than 15 years.
Opportunities for SMEs: Alibaba has been engaging with Australian retailers throughout the year, holding a variety of seller summits and e-commerce expos, including taking 500 businesses through best practice steps for selling through the platform at a two-day event run in October. Alibaba says there are currently 1300 Australian companies and 400 New Zealand companies selling through the platform.
Maggie Zhou said earlier this year that establishing an Australian office was only the very first step for the business in Australia.
“Longer term, Alibaba Group’s vision for the ANZ region is to build the entire operating infrastructure needed to enable local businesses to expand globally,” she said in February.
Global revenue: $US37.5 billion ($49.35 billion) in 2016.
Founded by: Liu Qiangdong, also known as Richard Liu
Australian operations: JD.com claims to be the largest e-commerce retailer in China by revenue, and courts more than 266 million active customers through “JD Mall” across all categories, including fresh food. Earlier in 2017, JD.com management visited Australia with an announcement it was searching for more than 100 Australian data scientists to develop artificial intelligence retail technologies for the business. At the time, head of digital marketing Paul Yan told The Australian “Australia is a very important market for us”.
In November, the company told Inside Retail it is undertaking more local recruitment with a long-term plan of opening up an Australian headquarters in the neat future.
Opportunities for SMEs: Inside Retail reports the company’s president of international corporate affairs says “thousands” of Australian brands already work with JD to sell through its platforms. In 2015, JD launched an “Australian Mall” product, allowing Chinese shoppers to peruse Australian-made offerings. In March, founder Richard Liu visited Australia to put the call out to local retailers, asking them to start the conversation about selling through JD.
“Even with the Chinese economy slowing slightly in recent years, the retail sector, especially online, has continued to see outstanding growth,” he told The Australian.
Global revenue: $US8.15 billion ($10.98 billion) for parent company vipshop in 2016.
Founded by: Eric Ya Shen and Arthur Xiaobo Hong
Australian operations: VIP.com has announced plans to procure more than $500 million of Australian goods in the 2018 financial year as the discount retailer works towards opening a Sydney distribution centre this year. The company’s head of global buying, Hillary Wang, said in a statement last week that the retailer is aiming to become the number one retail platform in China, with Australia being a “very strong market” from which to draw sellers in the future.
Opportunities for SMEs: The company says it is rapidly increasing its order volume quarter on quarter, with the most recent figures of 74 million transactions over three months amounting to a 23% increase on the 60 million orders it saw a year ago. The platform is more focused on female shoppers than others in this space, with 80% of its shoppers being female. VIP says it is focused on pulling more Australian retailers onto its platforms, searching for brands “rich in history, made with the best ingredients to the highest standards”, Wang says.
Revenue: $1.23 million in 2016.
Founded by: Jiahua Zhou
Australian operations: This Australian-founded, ASX-listed retailer might not yet be at the billion-dollar sales volume of other Chinese retail brands, but it’s still an important one for local SMEs to take note of. The business aims to capture the Chinese “daigou” market by connecting shoppers with locally made products. The business has plans to expand an e-commerce offering and capture a market of Chinese tourists and visitors by selling products through bricks-and-mortar stores within Australia.
Opportunities for SMEs: In a company update released yesterday, chairman Keong Chan signaled a focus on connecting with more local suppliers and brands. The business has secured a strategic alliance with Australian Made, which it says will provide it with access to 2700 local suppliers involved with the Australian Made organisation. The company has also secured the Jumbuck and UGG trademarks to sell these products through AuMake stores.
“We believe the Chinese tourist market has the potential to be equal to the daigou market in terms of brand promotion and raw purchasing power,” Chan said yesterday.