3mandarins attended the China Export Forum recently held in Sydney. The forum is designed to help Australian businesses and industry better prepare for exporting products and services into the Chinese market.
If you weren’t able to make it, we’ve summarized the 6 most important points from the forum as we see it.
- Export culture – We must engrain the export culture into the way that we do business in Australia. The market in Australia is not large enough to sustain long-term growth and small businesses will find it difficult to survive without having an export strategy. The focus is reflected in the recent NSW government decision to include Export in the Premier and Cabinet portfolio***
- E-commerce – E-commerce is revolutionizing the way that Chinese consumers purchase products. One of the best ways for Australian brands to get their products in front of Chinese shoppers is to get them on online stores such as Tmall which is similar to Amazon. However, Tmall which is owned by Alibaba, doesn’t sell products to customers they just provide a platform for merchants to advertise and sell their products to shoppers. Australia’s largest freight service provider Australia Post has seen the opportunity in e-commerce and opened an online store on Tmall, acting as a kind of online department store for Aussie products being sold into the Chinese market. The great advantage of this kind of sales platform is that you leverage of the high traffic volume and credibility of being positioned along side other ‘brand Australia’ products.
- ChaFTA – The China Australia Free Trade Agreement (ChaFTA) is a tremendous boost forward for the Australian export industry. Australia has done well to secure a ‘living, breathing, negotiating’ agreement, with Australia having ‘most favoured nation status’. This means if China reaches new agreements with other countries Australia automatically gets the same concessions.
- “Without a brand your just a commodity” – a popular theme which continued to be discussed during the forum was the importance of brand development. One successful Australian exporter, Nature’s Organics, presented a case study at the forum and interestingly much of their study focused on connecting their brand with Chinese audiences. In their market entry strategy, the very first step was to create Chinese brand names and secure trade mark registrations. They teamed up with a local Chinese company to assist them in branding and distributing their products across China.
- Pilot sites – Start in one area, use the local market as a testing ground, from there you can expand into other areas of China. It’s not necessary to try and get your products into several supermarkets from day one. Starting out in just one supermarket in one city can have its advantages as you can learn from the experience and gather information about customer tastes and marketing strategies. A good example is how Nature’s Organics started out in just one supermarket in Qingdao. From there you can develop you marketing strategy and expand into other stores and cities. Do be worried that just targeting one city won’t provide a bit enough market. You have to remember that China has over 40 cities with a population over 1 million.
6. Get over there – The final lesson we want to share is to just get yourself over there. If you haven’t been to China (and even if you have) make sure that you take a trip to China to feel and experience the country for yourself. You will never truly appreciate the opportunity until you go to China and see it for yourself. Going as a tourist won’t really expose you to all the business opportunity. It’s best to join a delegation of other Australian businesses that are visiting and participating in trade shows and forums in China. This way you can network and start to build relationships (or ‘guanxi’ as the Chinese say) with other businesses in the industry. The China journey can be a difficult one so it’s best to try and make as many friends as you can along the way.