Over 700 Kiwi firms tackle Chinese retail market
A2, Red Seal, Ecostore, Anchor and Comvita are leading the charge by New Zealand firms – which now numbers over 700 – now exporting to China via Alibaba Group’s Tmall and Tmall Global platforms.
Rising incomes across China, the urbanisation of the population and a burgeoning middle class have all contributed towards the rapid rise of the Chinese retail industry – now considered the goliath in global consumer markets.
Analysis by global research firm eMarketer says China will become the world’s top retail market in 2019, surpassing the US by over $100 billion. E-commerce is a key growth driver of China’s retail economy, with sales growing more than 30 per cent in 2019 to reach $1.989 trillion.
According to eMarketer, 35.3 per cent of China’s retail sales occur online and by the end of this year, China will have 55.8 per cent of all online retail sales globally.
Alibaba Group leads e-commerce sales in China with a 53.3 per cent share.
Michael Cheng, PwC China consumer markets leader for Asia Pacific says while scale makes the China opportunity strategically significant, retail innovation is what “truly puts it in a category of one”.
John O’Loghlen, and New Zealander and a Director of Alibaba Group in Australia and New Zealand, says New Zealand is an important market for the Chinese powerhouse, both for products and inbound visitors.
“Kiwi produce and products are incredibly sought after in China due to their clean and green image.
“There is enormous potential to build on the 700 Kiwi brands already on our B2C marketplaces Tmall and Tmall Global.”
With Chinese demand for New Zealand products ramping up, O’Loghlen says retailers can take advantage of Alibaba’s digital infrastructure ecosystem across payments, logistics, entertainment, marketing and more.
“We have a long-term strategic vision for Alibaba Group to serve two billion consumers and support tens of millions of merchants, small businesses, brands and retailers across the world,” says O’Loghlen.
Citing Australian pharmacy giant, Chemist Warehouse, as an example of a regional retailer taking advantage of the lucrative opportunities available in China, O’Loghlen says the firm has worked hard to build a strong reputation amongst Chinese consumers and have in turn, become extremely successful.
“During the 2018 11:11 Global Shopping Festival, Chemist Warehouse remained number one for overseas merchants on Tmall Global, achieving RMB100 (NZDD21.83) million in less than seven hours and exceeding total sales of the previous year.
“In fact, Chemist Warehouse’s Tmall Global store is the largest in the world by gross merchandise volume.”
New payment paradigm
Thousands of New Zealand retailers and tourism businesses are accepting Alipay and the industry is now reaching a critical mass to provide Chinese visitors to New Zealand with their preferred payments infrastructure.
“Today Alipay and its partners have more than one billion users,” says O’Loghlen, adding Alipay is the
Consumers can use Alipay to access discounts and coupons, while also make use of a discovery tool to find nearby businesses, driving visitors into offline stores.
“Today thousands of New Zealand businesses accept Alipay providing Chinese visitors an opportunity to use their preferred payment method,” says O’Loghlen.
Meanwhile, Alibaba Group now has a stronger presence locally with a dedicated team based in Auckland led by country manager Pier Smulders who reports into Maggie Zhou, managing director for Alibaba Group in Australia and New Zealand.
The Chinese retail giant will held its E-Commerce Expo – Alibaba Group’s flagship event program across Australia and New Zealand. The event was held in Auckland on 14-15 June attracting more than 9,000 buyers and ecosystem partners visiting over 120 exhibitors.
“The focus of this team is to help enable local brands, retailers and producers to successfully connect with Chinese consumers and inbound visitors to New Zealand,” says O’Loghlen.
“This is an exciting milestone in Alibaba Group’s continued mission to make it easy for Kiwis to do business anywhere.”