Cross-border e-commerce pursues dramatic growth, but can it continue?

By RJ Whitehead

- Last updated on GMT

© iStock
© iStock

Related tags: New zealand, Alcoholic beverage

The sheer scale of demand for Australian and New Zealand goods in China has been revealed in a striking report—though indications suggests that cross-border e-commerce might soon have reached its peak.

Mintel, the market analyst, found that more than a third of Chinese online buyers have now placed orders with companies Down Under across all categories. Around 25% of these were for food and beverage shipments.

In terms of baby food and related products, Chinese consumers are most likely to look towards the South Pacific nations. Mintel’s figures show that New Zealand has been the favourite in this category, currently attracting a whole 22% of online import shoppers, closely followed by Australia. 

Overall, 33% of those who have purchased imported goods online have bought baby food and products from the two countries.

The research also indicates that imported alcoholic drinks have also become very popular, with around one in five Chinese online consumers ordering their grog from Australia. This figure dips slightly to 16% for Kiwi liquor purchases.

Revealing the data, Mintel’s research director Laurel Gu said Chinese shoppers have become increasingly sophisticated while remaining influenced by the reputations of source countries. 

We see a lot of growth opportunity for brands in Australia and New Zealand to target Chinese consumers​. 

With Australia and New Zealand both having reputations for their strong focus on natural ingredients, food and drink companies could see great success by tapping into Chinese consumers’ healthy lifestyle, particularly within snacking occasions​,” Gu added.

Furthermore, the analyst estimated that the total combined online cross-border e-commerce market in China, known locally as haitao​, grew by a factor of more than 10 from RMB53bn (US$7.7bn) in 2011 to RMB626bn (US$91bn) in 2016. This represents an average annual growth rate of of 64%. 

From 2016 to 2021, however, growth is expected to slow, albeit to an impressive 15%, to reach a total value of RMB1.3tr (US$189bn).

While still strong, China’s haitao market has nearly reached its peak because many foreign brands are now already established within the China market, selling either through domestic physical stores, or domestic online shopping websites​,” Gu said. 

Neighbouring countries now have their own popular online shopping destinations for Chinese consumers. South Korea, for example, leads for shopping in beauty and personal care (45%), while Japan is the most popular country for personal electronics (28%). Outside Asia-Pacific, France is popular for alcoholic drinks (36%).

Beyond product quality, Gu said the key to grabbing Chinese consumers’ interest is through convenience and customer service. 

Brands in Australia and New Zealand could consider selling their products via China’s leading domestic shopping websites, providing Chinese-language customer service, offering fast delivery services, as well as implementing the usage of third-party payment systems​.” she added.

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