This week Down Under

Cross-border sales boom through China’s Tmall Global

By RJ Whitehead

- Last updated on GMT

© iStock
© iStock

Related tags Australia

Cross-border online shopping by Chinese consumers has surged this year, with half a dozen Australian brands making particular headway after putting in a strong performance on Alibaba Group’s Tmall Global e-commerce platform. 

An analysis of Tmall Global, which allows international brands to sell directly to Chinese consumers through its portal, showed that Australia’s top six performers were all related to the food and nutrition industry.

Though dollar figures are unavailable, Chemist Warehouse, Swisse, Blackmores, NaturesWay, the dairy farmer cooperative Devondale and the supermarket Woolworths were all among the top Australian brands that sell through the site.

Food came second out of all Tmall categories after beauty products. Australia ranked fifth overall behind Japan, America, Korea and Germany for sales on Tmall, with the most popular product categories being milk powder and dietary supplements. General food exports  were led by coffee, oatmeal and instant beverages.

In New Zealand, Chinese shoppers like the Countdown, Ecostore, Goodhealth and Red Seal brands.

Tmall said online sales have grown 30% in 2016 compared to the year before and buyers are becoming more "quality aware​”. The number of categories of goods doubled to 3,700, sourced from 63 countries.

"The report showed that a change in personal or family circumstances, the aspiration to experience new things and quality consciousness were the three driving factors behind the booming import consumption​. 

The majority of customers being driven by these trends were new parents, those born after 1990 and people who previously had bought from overseas online platforms​," it added.

According to Sydney University, China is Australia's second largest market for pharmaceuticals, with exports totalling A$381m (US$280.5m) in 2013-14, including vitamins and health products.

Demand for Australian products has reportedly been spurred in part by the rise of “daigou” or buying agents, effectively a Chinese merchant overseas who purchases goods for a customer back home in China.

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Australia’s generations of fast-food fans

Generations Y and Z are still markedly more likely than their seniors to eat at big-name fast-food chains, though the rate they visit them is in slow decline—perhaps due to the rise of hipster hangouts.

Fast food

According to new market research, the proportion of Australians who visited McDonald’s at least once a month has gone down slightly since 2012 to 29.5% from 31%, suggesting that Generation X and Baby Boomers might also be losing interest in the traditional fast-food joint.

Trade at rival Hungry Jacks has remained steady, though it has seen a pronounced decline among Generation Y customers and uptake among Gen Z-ers, the report, by Roy Morgan Research, revealed.

Meanwhile, the proportion of Generation Y diners who visit more niche and artisanal hamburger outlets each month has grown from 4.7% to 6.4%.

KFC rules the roost for fast-food chicken, though the proportion of Australians visiting the chain at least once a month slipped slightly. Like McDonalds, its popularity is strongest with Generations Y and Z. And though there has been a decrease among Generation Y visitors to KFC since 2012, Gen Z are more likely to go there now than they were four years ago. 

Percentage of each generation who visit burger chains in an average month, 2012 v 2016
Percentage of each generation who visit burger chains in an average month, 2012 v 2016

The smaller, more epicurean chicken chains Nando’s and Oporto were visited by 3.4% and 2.6% of Australians respectively in an average month. Once again, Generations Y and Z far outstripped their elders at these smaller players, but their numbers have mainly declined since 2012. Unlike burger restaurants, there is no obvious shift towards niche hot chicken joints. 

Percentage of each generation who visit hot chicken chains in an average month, 2012 v 2016
Percentage of each generation who visit hot chicken chains in an average month, 2012 v 2016

The rise of Domino’s Pizza is the key theme when it comes to the pizza segment. Despite its mainstream status, Domino’s continues to draw the younger generations, with Gen Y up from 13.5% to 15.5%, and Gen Z up from 14% to 18.5%, a growth also seen across other generations. 

Meanwhile, Crust Pizza and Pizza Capers, both much smaller and known for focusing on a much more foodie-orientated product, have gained Generation Z customers over the past four years. The latter has also experienced a boost in Gen Y visitation, but at this stage, the figures pose no threat to the big guys. 

Percentage of each generation who visit pizza chains in an average month, 2012 v. 2016
Percentage of each generation who visit pizza chains in an average month, 2012 v 2016

As Australia’s foodie culture grows the fast-food industry is obviously going to be affected. And the much-reported trend among Millennials—a group which spans approximately the first half of Generation Z and the second half of Generation Y—for hipster culinary experiences cannot be ignored​,” said Norman Morris of Roy Morgan Research. 

McDonald’s, for example, is actively addressing this, even opening an almost unbranded café (The Corner) in Sydney to try out potential hipster-friendly menu items before rolling them out in their stores. 

It’s also worth noting that Generations Y and Z are showing a growing penchant for Mexican fast food, and we will be monitoring visitation of relative newcomers such as Guzman y Gomez and Mad Mex in coming months​,” Morris added. 

Treasury Wine awarded Ben Fu trademark after legal battle

Treasury Wine Estates has won a landmark legal dispute in Beijing over its right to use the Chinese transliteration as a brand name for its flagship Penfolds wine.

Penfolds

The judgement, handed down by the Beijing High People's Court, found that a Chinese individual who had registered the “Ben Fu​” trademark in 2009 had “failed to demonstrate any genuine use of the trademark for wine or related business activities​”.

The Chinese trademark will now be cancelled, allowing TWE to claim its right to ownership.

Calling Penfolds the most widely recognised wine brand in the country, Robert Foye, regional managing director, said: “Protecting the integrity of our historic wine brands against trademark piracy is critical. We have never wavered in our commitment to defend our position as the rightful owner of the Ben Fu trademark in China, and we are absolutely thrilled with this decision​.”

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