Romantic vs. reality: What Australian businesses need to know about China’s cross border marketplaces

The recent Alibaba eCommerce Expo in Melbourne underscored the huge opportunities that cross border marketplaces provide Australian businesses looking to enter or promote their products/services to consumers in China. Australia Post hosted local Victorian businesses as they showcased their quality local product to attendees.

For starters, these marketplaces enable products from Australia or free trade zones to be sold on China’s domestic market without going through the registration processes required for international products being traded there. This removes a significant barrier to entry.

Cross border marketplaces also enjoy a reputation of being a trusted purchase platform. Its stricter listing rules are aimed at protecting consumers from counterfeit products and false benefit claims.

However these two factors only depict the romantic version of the Chinese market – one that is built around huge consumer numbers, reduced barriers of trade and excitement over the potential.

The reality is that a lot of hard work and investment of time and money are necessary for your business to establish a strong profile, a credible presence and enough product demand to convert marketplace listings into sales. Only then can it achieve the results that will fulfil the romantic version.

Based on Australia Post’s 12 years of experience in China and the discussions at the expo, these are what Australian businesses need to think about if they want to succeed in China’s cross border marketplace.

• Utilise the local market to build your brand in China
• Pair a well thought-out pricing strategy with a strong marketing plan
• Treat cross border marketplace listings as part of a wider strategy
• Take time to identify the right partners

Utilise the local market to build your brand in China

Showcase your products to Chinese buyers here in Australia and listen to advice on how to improve your brand for China. We’ve seen food brands altering their taste profile and adjusting their product packaging specifically for the China market based on feedback from their target consumers.

Pair a well thought-out pricing strategy with a strong marketing plan

Purchasing decisions within marketplaces are primarily driven by brand name searches. In other words, it would be very difficult for consumers to find your product if they don’t know where to look. This means your social media, marketing and use of influencers such as Key Opinion Leaders or KOLS is vital.

Also, conversion from listings to sales is heavily influenced by price. Rather than heavy discounting as your only strategy, consider ways to add or increase value for the customers like offering additional gifts with selected purchases, for example.

Treat cross border marketplace listings as part of a wider strategy

A marketplace listing alone isn’t a strategy for China. It must be one part of a wider strategy because being listed without having sales is like putting up a signpost in the Sahara. And that could potentially kill your other business opportunities. In fact, marketplace listings should be the final step in your business strategy.

Take time to identify the right partners

Partners are required to operate in China marketplaces to bridge the language barrier and as part of the required operational structure for some marketplaces, such as a trade partner for Tmall Global flagship stores.

The partner you choose will either be the start or end of your success there. Whether it’s a trade partner relationship, a marketing agency or a distributor, your success in China’s competitive market is strongly influenced by these partners.

When Australia Post entered China in 2005, we chose to partner with big players, like China Post and Alibaba, to create opportunities for Australian businesses there. We now have supply chain solutions, parcel sending options and 13 warehouses in China through our partnership with China Post – Sai Cheng Logistics International.

Today, we operate stores within marketplaces for brands that are developing their presence in China and further support them with advice and strategies to entering the Chinese market.

We know that Australian businesses want to be in China. And we want to play a key part in that journey towards developing the capabilities of Australian businesses there.

This article is provided for general information purposes only and is not intended to be specific advice for your business needs.