Tmall offers manageable entry into China

09 July, 2018 by
FMCG Business

In a trade exclusive discussion with Alibaba’s Global Business Development Director Yi Qian, we discovered opportunities for NZ businesses in China.

Tmall.com is Alibaba’s B2C success story, now with more than 18,000 brands from 80 countries selling to Chinese consumers via its online retail platform.

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China has the highest e-commerce penetration in the world and it’s growing fast.

Tmall offers a premium online shopping experience for increasingly sophisticated Chinese shoppers from daily consumables through to luxury items. Current growth on the platform is in triple digits and in Q1 2018, products from New Zealand have seen over 200% growth year on year.

Imports are showing 20-30% annual growth into China, so the next five years are critical for international brands to make a play to reach the lucrative Chinese consumer, said one of Alibaba’s Senior Executives, Yi Qian at a recent meeting with FMCG Business in Hangzhou, China.

Alibaba’s Global Business Development Director Yi Qian.

Yi Qian says: “This is the beginning of the consumer upgrade for China and it’s a significant opportunity for New Zealand brands. The number of Chinese that are moving into the upper-middle class demographic is enormous and everything to Chinese people is new.”

There are still regulatory hoops to jump through like in any market, however NZ Trade & Enterprise provide ongoing advice for Kiwi businesses looking to expand into China, along with many case studies to assist with decision-making along the way.

The top five Kiwi businesses on Tmall (in no particular order) are A2, Anchor, Comvita, Fonterra and Anmum, showing a particular love for New Zealand dairy by Chinese consumers. Others include Whittakers, Trilogy and Kathmandu.

There are huge areas of opportunity to capitalise on New Zealand’s clean, green image with products that are natural, different and especially organic. But Sanitarium’s Tanne Andrews said “Clean and green is great, but there has to be more”, Chinese consumers are increasingly savvy and brands need a strong story and heritage to go along with it.

“WOM (word of mouth) is important in business here, attending local events and getting close to the local community,” Yi Qian continues. “It’s also important to start building a local brand identity online so consumers will have higher confidence when they research your business.”

Adding and promoting an Alipay option to your New Zealand-based online or bricks and mortar business will also be noted by Chinese tourists and will add credibility and familiarity to any offering within China.

China holds great potential for New Zealand business, however it can be challenging for SME’s if there isn’t a solid and evolving plan on how to approach it. Success at home does not guarantee success in China.

Products such as Tmall or TGlobal provide the online infrastructure and audiences that can give business an entrée to test-market brands without the significant investment that would usually be required.

If you would like more information about how Alibaba Group can open the doors to China for your business, please contact New Zealand Country Manager, Pier Smulders piersmulders@alibaba-inc.com