Australian goods remain popular at China’s Singles Day festival despite trade tensions
The world’s largest online shopping festival has set a new sales record with Australian businesses playing a big role.
- Year-over-year sales growth fell to its lowest since the start of the festival
- Australian health supplements were most popular among foreign brands on Alibaba’s e-commerce platforms in September
- Personal shoppers known as daigou ‘die’ as sales channels evolve
This year’s 11.11 World Shopping Festival, known as the China Singles Day event, generated $ 115.8 billion in sales during the Chinese tech giant’s 11-day campaign. Ali Baba.
But year-over-year sales growth fell to 8.5% – its lowest since the festival started in 2009.
Millions of Chinese consumers, who had stacked products in their digital carts across nearly 500 online shopping platforms, rushed to check their orders as the clock struck past midnight until Thursday, the main day of the event.
“This year’s festival is one of the biggest opportunities for Australian businesses to reach consumers in China,” said Maggie Zhou, Managing Director of Alibaba Group, Australia and New Zealand.
“With the festival in its 13th year … more than 900 million consumers across China and more than 290,000 merchants and brands are joining the campaign.”
Despite the large number of buyers, there have not been any of the usual countdowns or triumphant comments from executives of major platforms, as the e-commerce industry continues to maintain a lower profile amid a government crackdown on platforms like Alibaba.
Australian products still popular
Health supplements, adult milk powder, infant and toddler nutrition, and powdered emulsion and drink mixes were the top five Australian product categories for Chinese consumers.
But even before Singles Day, Australian health supplements were already the most popular among foreign brands on Alibaba’s e-commerce platforms in September, according to Chinese e-commerce agency TMO Group.
It was followed by the United States, Japan, Germany and Canada.
The Common Good Group (TCGG), a company that helps Australian brands reach Chinese consumers through China’s cross-border e-commerce platforms, said vitamins and minerals are a significant part of Alibaba’s sales figures. on Singles Day.
Likewise, Australian beauty supplements, probiotics, and products for gut and immune health were also extremely popular in China.
“There are obvious problems with Australia and China from a political point of view,” Jeremy Hunt, TCGG CEO and daigou expert, told the ABC.
“But on a person-to-person level, Chinese consumers don’t care where their [products] come, because the products themselves have good benefits. “
Mr Hunt said Australian companies selling to China have seen a huge shift in their sales channels due to the very limited number of planes and ships entering China during the COVID-19 pandemic.
“It meant brands had to change the way they target and sell their products,” Mr. Hunt said.
“Instead of going through the retail channel or the daigou channel, they had to go directly to China.”
Daigou buyers, who purchase domestic products in Australia on behalf of their customers in China, have created a multi-billion dollar economic channel in recent years, integrating retail, marketing and logistics services to across Australia.
The controversial practice has created huge brand awareness for Australian brands in China, which Mr Hunt says has led many Australian companies to choose to open official stores on Chinese e-commerce platforms.
He said that meant daigou buyers were no longer buying from outlets like Chemist Warehouse and Woolworths.
Instead, they were now promoting products to Chinese customers, who buy from Chinese platforms offering Australian products.
“But marketing to Chinese consumers and Australian daigou was still very important,” Hunt said.
“Chinese consumers still believe that Australian brands offer a highly effective and highly accredited product and brand compared to the Chinese brand.
“So people always choose to buy Australian brands.”
Direct selling replaces daigou personal shoppers
There are over 2,000 Australian businesses and 700 New Zealand businesses with official online stores on Alibaba.
And as brands increase their direct sales to Chinese consumers, demand for daigou buyers is collapsing.
Former full-time daigou customer Christine Liu has gone from selling at least 300 boxes of infant formula a month before the pandemic to selling almost zero boxes in October.
This forced her to find a new job to survive.
“You could say that daigou is dying, and these two years have been extremely difficult for the industry,” the 29-year-old told ABC.
“Many Australian brands now have their own online stores and warehouses in China, and they are able to offer record prices to Chinese customers. “
Ms. Liu only serves regular customers who have a strong connection to her on the Chinese social media platform WeChat.
She said there were other “unavoidable” factors that created challenges for daigou, such as customers waiting months for their packages to be sent from Australia.
With the delay in clearing parcels at Chinese ports, even many of its regular customers have lost confidence.
“And the media in China are really promoting the concept that the Chinese should buy Chinese products, instead of buying imported products.
She also said that at least 50% of her customers have canceled regular orders and turned to national brands in China for fear of contracting COVID-19 from packages.
China has urged its ports to minimize the risk of transmission of the coronavirus after discovering cases of contaminated frozen food packaging coming from abroad, which has hampered public confidence in foreign products.
Even though there was still demand from Chinese consumers, lockdowns in Melbourne and Sydney, along with Australian border restrictions that blocked tourists and international students, led the industry to run out of manpower.
“Daigou was compromised by all of these factors,” Ms. Liu said.
China isn’t the only lucrative market
As relations between Australia and China deteriorated, trade restrictions Beijing imposed on Australian products pushed exporters to find alternative markets.
Despite the great reputation of Australian products and the income associated with selling in Chinese markets, the conflicts between Canberra and Beijing have made it difficult to find influencers on social media to promote Australian products.
“So they were more aware that they should talk less about Australia and more about the product, function and performance.”
Jerome Fu, global director of marketing and e-commerce at vitamin and supplement supplier Australian NaturalCare, said his company’s pre-sales for Singles Day began in November and included promotions aimed at the public live on Chinese social networks.
But he told the ABC the company is studying other emerging markets in the Asia-Pacific region.
“Chinese tech giants such as Alibaba and JD.com are also building established online shopping platforms in these markets.
“These countries also have very good potential.”