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5 Ways to Leverage the Growing Chinese Market6 min read

6 min read

China-Australia Free Trade Agreement

The recent buzz around the growing Chinese market is well-deserved. In the past, China’s borders were difficult to breach and doing business with China often included a mountain of paperwork and less return on investment than the effort warranted. Over the last few decades, this situation has improved dramatically.

Australia already has an established rapport with China. China became Australia’s largest export market by 2009 and Australia is now China’s seventh largest trading partner worldwide. Annual trade between the two nations is $150 billion AUD and Australia exported $95 billion AUD in products to China last year. This trade partnership will blossom in 2015 when the China-Australia Free Trade Agreement (ChAFTA) goes into effect.

What does this mean for Australian marketers? The free-trade agreement with China will give Australian entrepreneurs access to the world’s second-largest economy. Only the U.S. outranks their GDP and China is experiencing unprecedented levels of growth. Expected growth in China for 2015 is around 7.5%, consistent with the past two years. In comparison, the United States GDP grew by 5% in 2014 and Australia by just 2.7%.

Additionally, 85% of Australian goods exported to China will now be tariff-free, allowing marketers to compete fairly in a once closed market. This will rise to 93% after four years and 95% when ChAFTA is in full swing. China recognizes that they do not have the resources to fill the demands of their consumers, which presents huge opportunities for B2B and B2C enterprises.

Shanghai skyline view from the bund

Finally, a recent court decision has confirmed China’s commitment to competition. In a David and Goliath battle, underdog Qihoo 360 went up against TenCent claiming the giant had a monopoly in the PC-based and mobile instant messaging service markets. While TenCent does own 80% of the market share, the court struck down the monopoly claim and this decision is now viewed as a positive sign of change towards innovation and competition, rather than regulation and control, making it a great time to enter the Chinese market in 2015.

For business owners contemplating expansion into the Chinese market, here are five ways to get started:

1. Check Out Australia Post and Alibaba

Australia Post and Alibaba signed an agreement that provides a simple way for Australian businesses to access this new, rich market. If you do not know about Alibaba already, it is time you did, as this retail powerhouse has more than 120 million online visitors every day. It is China’s largest online third-party platform for brands and retailers.

The collaboration with Australia Post allows Australian businesses to use their Australian business licenses to sell and ship their products directly to Chinese customers. A spokesperson for Alibaba noted that Australian baby care, health and nutrition, and beauty products are highly desirable, as Australia is known to produce clean and healthy products.

The number of Chinese tourists visiting Australia is skyrocketing and they want access to the same products and brands they use while visiting. According to Tourism Australia, China was Australia’s second largest inbound market for visitors in 2013 and they were the biggest spenders.

2. Add Alipay To Your Website

Alipay is the Chinese equivalent of PayPal and just as simple to use. Alipay ePass allows Australian marketers to use their existing e-commerce site to directly serve Chinese shoppers.

The Alipay payment option can easily be added to your checkout and it offers the same level of security as PayPal. It is already the most widely used payment service in China. It also integrates well with Alibaba’s other websites, Taobao, Tmall Global and Tmall. These three platforms own around 80% of the total e-commerce market in China and get over 100 million visitors a day.

alipay logo

3. Open A Store Through Tmall Global Or Tmall

Tmall Global is a business-to-consumer and business-to-distributor (B2C) platform that connects your products to China’s rising consumer market. You can advertise directly to the 1.35 billion buyers and you do not need a Chinese business license to do so.

You must provide a product return strategy within China as well as Chinese customer service support.

Tmall is the largest business-to-consumer (B2C) retail platform in China, providing direct access to Chinese consumers.

Tmall requires that your business is in mainland China and that you have a Chinese retail business license. They emphasise quick, traceable delivery (within 72 hours), so your products should be stored in China, too. There is also a “no questions asked” return policy for buyers within seven days of receiving the product.

4. Buy Through Taobao is another Alibaba offspring. It is the Chinese version of eBay, which allows people and companies to sell to each other. Taoboa is fully translated into English, so you can search for goods and buy from China. Taobao also allows agents who can help you with your order and cut your international shipping charges because they deal in bulk.

Taobao Logo

5. Utilise Baidu

Baidu is basically China’s version of Google, with a whopping 79.48% market share. In the third quarter of 2014, Baidu pulled in over $2 billion in revenues, a 52.0% increase from the previous year. Growth is estimated at 50% per year.

Why is Baidu important to marketers? If you want your website to be found by Chinese consumers, you need to make sure that Baidu can index it, so it pays to do some Baidu SEO. You may want to consider a China-based website to increase your chances of being found by this search engine. Content is required to be in simplified Chinese, so consider partnering with a Mandarin SEO expert if you go this route.

In addition, Baidu has developed the best commercial speech recognition system in the world, called deep speech, as part its well-recognised deep learning focus. It is accurate nearly 81% of the time, far greater than Apple, Bing or Google’s voice recognition software. Integrating Baidu in your business now could be a huge advantage in the burgeoning Chinese mobile and wearable market.

Like Google, Baidu provides translations for users, meaning you can can translate from Chinese to English if you want to check out the competition and to prepare listings for your site.

No time like the present

The statistics don’t lie. China has incredible potential for sales and now Australia is in the perfect position to sell. Besides the proximity to this huge market, Chinese consumers are already aware that our products are high-quality and more of the Chinese population is visiting our country each year.

Any ambitious marketer should explore the possibilities now before the market becomes saturated. This huge market is available with minimal cost and time investment and there is an enormous potential for huge returns. We live in a global market and the second biggest buyer in the world just swung it doors wide open. Why not step through and reap the profits now?

Interested in expanding your business into China? Contact the team at Croud Australia to find out how we can help.