Breaking into the Chinese market is becoming easier for small businesses. With platforms such as Tmall, entrepreneurs are taking shortcuts to reach the lucrative market faster.
Subscription beauty service Bellabox is one of the latest Australian businesses to launch in China through Australia Post’s recent collaboration with Tmall.
Owned by ecommerce giant Alibaba Group, Tmall is a retail platform for brands to sell to consumers in China, Hong Kong, Macau and Taiwan.
Before the agreement reached with Australia Post this year, Australian companies could only sell products through Tmall if they met strict conditions, including registering in China and employing local staff. Now, small and medium-sized enterprises (SMEs) without the scale of their bigger counterparts can push their way into the Chinese market.
Catherine Cervasio, founder and managing director of Aromababy, has been exporting her products to China for the past six years. But it took two years of careful planning and preparation.
“We’ve invested in educating, registering and licencing in China to sell in bricks and mortar stores,” she says.
Cervasio says her company took the “long, hard road” to the Chinese market in order to be sold from the shelves of Chinese stores, but it was well worth it.
“We started shipping dozens of bottles over, then hundreds and now it’s tens of thousands,” she says.
“We just signed a new, five-year deal with a distributor that will see us triple our business in China.”
Explore how many competitors your company would face in the Chinese market and explore any gaps in the market.
More than 5600 Australian SMEs export to China with a further 4800 trading with China through Hong Kong, according to data from the University of New South Wales Business School. Follow these tips to join the ranks of Aussie exporters enjoying the Chinese market.
Do your homework
Market research is critical before investing in an expansion. Explore how many competitors your company would face in the Chinese market and explore any gaps in the market. Do the numbers to ensure your business can meet demand?
With 1.37 billion consumers, China is a big market. Cervasio suggests dipping your toe in the water by launching in Hong Kong or Singapore before trying China.
Export consultants can help guide your company through the steps to success in China. Choose someone with commercial experience, contacts, and preferably someone who can speak Mandarin. Additionally, seek out a mentor who has cracked the Chinese market and is happy to give advice.
Kate Jones writes for the business and money sections of The Age and Sydney Morning Herald. She also writes for The New Daily, TAC, RMIT and is a news writing tutor at Monash University.