Since its inception in December 2015, the China-Australia Free Trade Agreement has presented potential advantages for Australian businesses, including driving exports. Between 2015 and 2016, more than 25 percent of total Australian exports went to China, earning Australia as much as AU $85.9 billion in revenue[1].
In 2015, the National Bureau of Statistics of China recorded a 39 percent increase in online retail sales over 2014 [2]. According to the same report, analysts forecast that in 2018, more than 40 percent of the total Chinese population will have purchased products online. This estimate presents potential for Australian retailers to reach Chinese consumers through online channels.
The allure of Australian made
A FedEx survey[3] in March 2017 of 1,000 Chinese online shoppers revealed that demand for Australian-made products remains high because of the positive perception towards Australian goods, which are often associated with quality, safety and being good value for money. 84 percent of Chinese online shoppers have expressed the intent to purchase at least one Australian product in the next 12 months. In fact, 81 percent of the Chinese consumers surveyed by FedEx have purchased at least one Australian product online in the past.
Australian goods appear to have succeeded in earning awareness amongst Chinese online consumers, which makes China an important market for small- and medium-sized enterprises (SMEs). FedEx research revealed two of the most popular categories of goods sought by Chinese shoppers are Beauty (31 percent) and healthcare (25 percent) products, while dairy (58 percent) and baby products (39 percent) are perceived to be ‘world-class’[4].
Build trust by being where they want you to be
The credibility of product listings is a key influencer for Chinese online shoppers, with 79 percent stating they would buy more Australian products if they were available on Chinese-owned global online marketplaces[5]. These global marketplaces allow international businesses to sell directly to Chinese consumers. Consumers are provided with a secure payment solution, and retailers have access to valuable, real-time consumer data.
With a number of Chinese consumers having suffered a mobile device data breach[6], cyber security is a major concern. Six in ten shoppers consider online payment safety (61 percent) and product authenticity (60 percent) as paramount when deciding whether to make an online purchase[7].
The pervasive influence of content marketing
The Chinese e-commerce experience seems to differ from that of the West. In the West, online shopping originally emerged as a more efficient way to shop. In China e-commerce may serve a different need, providing a richer alternative to traditional shopping. Instead of seeking out a specific item and making a purchase quickly, Chinese consumers usually explore online retail websites to discover new and popular products[8]. The discovery journey guides their eventual purchase decision. As such, a rich online content strategy is important in growing an online business in the Chinese market.
Celebrity endorsement is a way to build preference amongst Chinese shoppers. Our survey found that 60 percent of respondents are more likely to buy if they see their favourite social media celebrities use their products. WeChat, a popular social media app in China, has cybercelebrities with large followings promoting brands by posting messages to their network. These messages include products and even a payment button to increase the likelihood of immediate purchase[9].
Reliable delivery important for online shopping
Shipping and delivery plays an equally important part in the overall online shopping experience. FedEx research revealed that the most prominent barrier preventing Chinese online shoppers from purchasing Australian goods is the perception that delivery takes too long (35 percent)[10]. Eighty percent of survey respondents agree they would be more likely to purchase an online Australian product if the seller used a well-known and reputable international shipping company. In addition, the ability to return a product without extra hassle and cost (69 percent), reliable solutions for outsized, perishable or fragile deliveries (66 percent) and fast delivery (57 percent) were all identified as highly important when deciding to buy Australian products online.
For Australian businesses to fully harness e-commerce, the full shopping process including delivery and returns has to be an easy and seamless customer experience.
[1] “Composition of Trade Australia 2015-16”, Australian Government – Department of Foreign Affairs and Trade, January 2017
[2] “China’s online retail sales to double in three years, analysts say”, South China Morning Post, July 2016
[3] “Chinese Online Shoppers: The Allure of Australian Made”, FedEx research, fieldwork conducted between 15-24 March 2017
[4] “Chinese Online Shoppers: The Allure of Australian Made”, FedEx research, fieldwork conducted between 15-24 March 2017
[5] “Chinese Online Shoppers: The Allure of Australian Made”, FedEx research, fieldwork conducted between 15-24 March 2017
[6] “eCommerce in China – the future is already here”, PwC, 2017
[7] “Chinese Online Shoppers: The Allure of Australian Made”, FedEx research, fieldwork conducted between 15-24 March 2017
[8] “The Chinese Customer’s Online Journey from Discovery to Purchase”, BCG Consulting, June 2017
[9] “The Chinese Customer’s Online Journey from Discovery to Purchase”, BCG Consulting, June 2017
[10] “Chinese Online Shoppers: The Allure of Australian Made”, FedEx research, fieldwork conducted between 15-24 March 2017
About the author
Kim Garner is Managing Director, International Operations, FedEx Express Australia and New Zealand.
