Retail

Singles’ Day highlights scope of e-commerce in China, but patience is the name of the game for Aussie SMEs

Emma Koehn /

Alibaba Jack Ma and Malcolm Turnbull

Australian Prime Minister Malcolm Turnbull meets with Alibaba Group’s executive chairman Jack Ma during his first visit to the company’s headquarters in Hangzhou, China. Source: Supplied

Business confidence might be shaky in the wake of this week’s US election result but consumer sentiment won’t be dampened for China’s Singles’ Day sale, with online retail giant Alibaba claiming sales from this year’s event will top last year’s total of more than $US14.3 billion ($18.8 billion).

Alibaba Australia’s chief executive Maggie Zhou told The Australian earlier this week that Australian retailers were the fifth-largest supplier in last year’s Singles’ Day sale, which is held on November 11 each year when Chinese citizens celebrate being single with some serious online shopping. Last month Alibaba President Michael Evans told Bloomberg the event is predicted to hit record turnover this year, with new features on offer to court consumers, including an eight-hour live-streamed fashion show.

Read more: The Aussie businesses making the most of China’s $20 billion Singles’ Day 

But as Australian business owners continue to experiment with the best way to enter the Chinese market, one expert believes that nobody is being patient enough.

“What I see is that SMEs usually don’t realise that they need to invest a bit of time before seeing results,” says Nicholas Chu, chief executive of marketing platform and consultancy Sinorbis, which aims to help clients sell into China with solutions for website development, social media and web analytics.

“I don’t think they realise there’s an element of investment – time to understand, having people on the ground. It goes beyond just the online system.”

Chu, whose has previously been director of HotelClub and managing director of the pacific region for Expedia.com, is no stranger to building relationships with Chinese stakeholders. He says it’s imperative that business owners spend time in China before entering the market.

“There’s language issues and a lack of knowledge of the channels,” he says. “I think you need to go there if you’re going to have a chance.”

While the Australian Government has made it a priority to support local businesses in their efforts to reach the market, Chu believes there needs to be greater focus on how to market products to a fragmented audience.

“Chinese consumers know nothing about western brands unless they’ve already been pushed in China,” he says. “You don’t target Shanghai and Beijing the same way you target Chengdu. Even when I was [working] on some of the leading online brands in the world, I was going after one specific market.”

The cultural diversity of Chinese shoppers and how they respond to marketing is something that has taken a backseat in government rhetoric about trading in China to date, with a focus more on the mechanics of selling via online platforms.

“Within China, you have the same differences [in audience] as there is between a French consumer and a German consumer. Spend enough time looking at the market to understand that. You can’t go after the whole of China – that’s impossible,” Chu says.

In September Prime Minister Malcolm Turnbull inked a deal with Alibaba chairman Jack Ma to launch more Australian retailers into the region through shopping platform Tmall, and spruiked a dedicated advertising channel on Youku.com for Australian products.

“This partnership opens the door to future cooperation in some of Australia’s priority industries, including emerging digital service delivery areas such as e-health, financial services, sporting event management and assisting innovative startup companies,” Australia’s senior trade commissioner in China Michael Clifton said on the announcement of the deal.

The federal government is particularly focused on demand for fresh Australian produce in the region, and Alibaba is also showing interest in businesses that assist with efficient importing of fresh food. Last week Alibaba-funded venture capital firm Riverhill Fund contributed to $US20 million ($26.2 million) in Series-A funding for fresh produce logistics startup Gfresh, which has offices in Shanghai and Sydney.

“In two years, over $US200 million of seafood has already been sold/purchased through the platform, with a goal for $US600 million by the end of 2017,” Gfresh said in a statement on the fundraising.

Chu believes that the with the right focus, the Australian government’s deal with Alibaba has the potential to change the landscape.

“It will have a big, big impact and quickly. But it all depends on the investment they will be doing,” he says.

“There would be one Australian brand among other brands [in Tmall], and you need to push your brand and do marketing in parallel. You need to let people know why people should buy your product.”

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Emma Koehn

Emma Koehn is a former senior SmartCompany journalist.