THINK
CHINA
CHINESE ONLINE CONSUMER BEHAVIOUR TOWARDS AUSTRALIAN PRODUCTS
BENJAMIN SUN CO FOUNDER & DIRECTOR OF THINK CHINA WILL BE A KEYNOTE SPEAKER AT THE
Wednesday 11 Nov, Four Seasons Hotel Sydney Friday 13 Nov, Sheraton Hotel Melbourne Receive a complementary copy at the event www.ABF.Events THINK
CHINA
TABLE OF CONTENTS 04
EX EC U T I V E S U M MA RY K E Y FIN D IN G S
05
ABO U T T H IN K C H INA
06
D ISC L AIM E R
07
I N T RO DU C T I O N
08
R ESEA RC H M E T H O DO LO G Y
09
U N DER STA N DI N G C H I N ESE O N L IN E CO N SU M E R S
10
PO W E RFU L FE MAL E B U YER S
12
SH O PPE RS BO RN P OST- 80S CONSU M E THE M OST ONL INE
13
YO U R TRU E TAR G E T MA R K E T IN C HINA
15
PR O FIL E S O F RE AL ONL INE SHOPPER S
19
P R EF ER R ED AU ST R A L I A N P RO DU C TS
20
H O W CO N SU M E RS L EA R N A B OU T OV ER SEA S PR ODU C TS
21
TH E M O ST PRE FE RR ED AU STR A L IA N PR OD U C TS
22 25
CO M PE T I T I V E L A N DSC A P E AU ST R AL IA’S K E Y COM PE TITOR S
27
W HY C H IN E SE SH O PPER S B U Y OV ER SEA S PR ODU C TS
29
PR O D U C T Q UAL IT Y IS THE K E Y DR IV ER
30
YO U R D IG ITAL ST R ATEGY
32
W H ER E TO F RO M H ER E
34
A B O U T T H E AU T H O R S
35
Chinese Online Consumer Behaviour Towards Australian Products
3
EXECUTIVE SUMMARY The China-Australia Free Trade Agreement (ChAFTA) unlocks great opportunities for Australian businesses, making it an exciting time for trade developments with partners in China. The ever-changing e-commerce landscape in China is complex and prone to contradictions. Informed decision-making based on reputable data is necessary for Australian businesses to navigate the Chinese market successfully. Chinese online consumers are not a homogenous group. There are significant variations in age, geographic location, income and cultural values. Increasing numbers of customers are turning to online shopping every day. Interpreting the data available on these online consumer groups – and the demographic trends that underpin them – provides retailers a useful foundation on which to
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Chinese Online Consumer Behaviour Towards Australian Products
build their China strategy. A data-driven approach is the key to success in the Chinese market. Comprehensive analysis of data allows Australian businesses to prioritise opportunities with greater certainty and employ strategies most suited to engaging with these consumers. The results of this research are an important resource that enables more Australian businesses to export to Chinese consumers. This white paper aims to be one of the pillars supporting Australian businesses following ChAFTA. This guide has been prepared to provide essential information to assist Australian businesses make informed decisions as they begin their journey into China.
KEY FINDINGS •
With 75 per cent of online consumers residing in second-tier and third-tier cities, their combined market shares of overseas goods and services online by spend reaches 65 per cent, almost double that of first-tier cities.
•
Chinese women are powerful online shoppers, making up 66 per cent of users searching for Australian products on e-commerce platforms Tmall and Taobao.
•
Milk powder, food, supplements and skincare products, are the most preferred Australian products among Chinese online shoppers.
•
Australia’s largest competitors in China vary depending on the product category. Chinese online consumer preferences ranked Australia second for organic food, behind New Zealand. Australia was the third most preferred nation for health supplements and red wine.
•
Product quality is the most important factor that affects shopping behaviour, with 83 per cent of Chinese consumers naming product quality an ‘extremely important’ consideration when purchasing overseas products online. Price has the least effect on overseas product purchase.
THINKCHINA Think China is an insights-based digital marketing consulting firm based in Australia and China. We pride ourselves on being thought leaders in Chinese web technology, including information and measurement, web design, development practice, and cloud deployment tailored to the Chinese market. Our primary focus is to provide assistance to Australian businesses who wish to develop and deepen the digital relationship between their brand and Chinese consumers. 6
For more information, visit www.thinkchina.com.au
Chinese Online Consumer Behaviour Towards Australian Products
DISCLAIMER The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or entity should act on such information without appropriate professional advice after a thorough examination of the particular situation. Š2015 THINK CHINA - a division of Cathay Digital Pty Ltd Australia, All Rights Reserved Liability limited by a scheme approved under Professional Standards Legislation
Chinese Online Consumer Behaviour Towards Australian Products
7
INTRODUCTION The number of Chinese online consumers continues to grow, with the number of shoppers reaching 361 million in December 2014, an increase of 19.7 per cent compared to the previous year, found the China Internet Network Information Centre in 2015. The growth in the number of online Chinese shoppers, and the formidable purchasing power of Chinese consumers, makes the online Chinese marketplace an important channel for Australian enterprises. The latest research published by PayPal on July 28 2015, has identified 52 per cent of Chinese online shoppers plan to begin or plan to purchase more overseas goods. Despite the popularity of Australian products in China, as of July 2015, there were only 47 individual Australian brands with an online presence on Alibaba’s shopping platforms Tmall and Tmall Global. An additional 78 Australian brands are sold through authorised online resellers. As an Asianliterate trading nation, Australia certainly has a lot more to offer. Australian exporters see China as an opportunity with many unpredictable risks. Many Australian businesses that have considered entering or attempted to reach online consumers in China have had limited success due to the lack of data-driven knowledge of Chinese online shoppers, consumption priorities, and purchasing behaviours. Through this white paper on Chinese online consumer perceptions of Australian products, we hope to enable Australian business to understand and seize the opportunity presented by Chinese online customers.
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Chinese Online Consumer Behaviour Towards Australian Products
RESEARCH METHODOLOGY The findings of this market research are based on primary studies of search volumes, trends and buyer behaviours of Chinese online consumers. We have captured and interpreted data from various online channels including search engines, e-marketplaces and social media platforms. For a qualitative understanding of Chinese buyer behaviour, we also distributed a survey to 3,000 Chinese online consumers who had purchased at least one overseas product online in the previous 12 months. This survey was conducted online within mainland China between July 1 and July 31, 2015. Figures for age, gender, region and marital status were weighted where necessary to bring them into line with their actual proportions within Chinese online consumers. Respondents for this survey were selected from those who had agreed to participate in the survey. Although an online survey allows for tremendous scale and a wide reach, it provides a perspective only on the habits of existing Internet users, not of the total population. Therefore, this survey’s responses are based on claimed behaviour rather than actual metered data.
Chinese Online Consumer Behaviour Towards Australian Products
9
UNDERSTANDING CHINESE ONLINE CONSUMERS China has its own language, media properties, and unique Internet environment. The way consumers use the web and interact with content and websites differs significantly from Australian web users and other users from around the world.
Using Alibaba’s Tmall and Taobao analytics platforms data cubes, from July 2014 to July 2015, as shown in Figure 1, most online shoppers who searched for Australian products on Tmall and Taobao live in cities on China’s east coast. Although
consumers from first-tier cities, such as Beijing, Shanghai and Guangzhou, dominated searches for Australian products, the performance of secondtier and third-tier cities was also significant.
Figure 1 Users Searching for Australian Products on Tmall & Taobao (Gender & Cities) From July 2014 – July 2015 Taobao Index
Through analysis of 3,000 survey results regarding spending on overseas goods and services online in the last 12 months, as shown in Figure 2, the majority of consumers in
10
first-tier cities spent $5,000 - $10,000 on overseas goods and services online annually, compared to their secondand third-tier neighbours who spent $1,000 - $3,000.
Chinese Online Consumer Behaviour Towards Australian Products
However, if we add the total market share of overseas goods and services online spending by city tiers, with 75 per cent of consumers residing in second-tier and third-tier cities, their
Figure 2 The Difference in Spending between Tier 1 and Tier 2 & Tier 3 Cities in China, Survey Result Spending on Overseas Goods and Services Online in Last 12 Months by City Tiers 30%
28% 25%
25%
22% 20%
20% 19%
10%
15% 18%
15%
16% 13% 7% 8%
5% 0%
2% 4%
<$1,000
$1,000-$3,000
Tier 2 & 3
$3,000-$5,000
$5,000-$10,000
$10,000-$20,000
$20,000-$50,000
1%
>$50,000
Tier 1
combined market share by spend reached 65 per cent, almost double that of the first-tier cities. The significant value of online
purchases from second-tier and third-tier cities reflects lower access to bricks and mortar stores belonging to foreign brands in these locations. As a result, shopping online is the
most effective way for consumers from these cities to purchase overseas goods.
Market Share of Overseas Goods and Services Online Spend by City Tiers
$8,676 Average Annual Spend
$5,389
25% Consumer Distribution
75%
35% Market Share by Spend
Tier 1
65%
Tier 2 & 3
Chinese Online Consumer Behaviour Towards Australian Products
11
POWERFUL FEMALE BUYERS In China, women are the primary decisionmakers when it comes to daily household consumption and bulk purchases for their families. In 2011, women made about 77 per cent of the household spending decisions, according to a survey conducted by Women of China Magazine . The Women of China Magazine research shows more than 60 per cent of average household income went to consumption in 2011. Women in China ranked household appliances as the thirdmost important shopping priority in 2012, whereas real estate and vehicles ranked fourth and seventh respectively. Today, the trend remains the same in online shopping. In July 2015, 66 per cent of online consumers on Tmall and Taobao who searched for Australian products were female, and 34 per were male (Figure 3). However, women only attributed to 45 per cent of internet users in China in 2014 (Figure 4). This gender disparity within the internet population partly reflects a wider gender imbalance in China due to the one-child policy.
Figure 3 Users searching for Australian products on Tmall & Taobao - Gender, Data Cube
Male 34%
Female 66%
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Chinese Online Consumer Behaviour Towards Australian Products
Figure 4 Gender Structure of Chinese Internet User 2014, CNNIC 35th Report
Male
55%
Female
45%
SHOPPERS BORN POST-80S CONSUME THE MOST ONLINE Over 55 per cent of the online population in China is aged between 20 and 40 (Figure 5). According to the China Internet Network Information Centre, most of these individuals are the first generation of China’s ‘one child’ policy, introduced in 1980. The parents of these first-generation only children lived through China’s
Great Leap Forward (1958-1961) and the Cultural Revolution (19661976). Many among this group have witnessed or experienced first-hand, low availability of consumer goods during this period. As a result, these parents want to provide their adult children with a better life than the one they
Figure 5 Age structure of Internet Users in China, CNNIC 35th Report Aged below 10
1.7%
Age 10 - 19
Age 20 - 29
Age 30 - 39
Age 40 - 49
Age 50 - 59
60 and above
22.8%
31.5%
23.8%
5.5%
2.4%
After more than 30 years of the one-child policy in China, the first generation of only-children are
Australian businesses who wish to sell products that service this demographic have had to target these consumers through their children. Appealing to Confucian values of respect for family elders can encourage adult children to purchase goods for their parents. For example, Nestlé sells fortified milk powders through advertisements that encourage grown-up children to look after the health of their aging parents. Evidence of purchase behaviours on behalf of family members can be seen in consumer activities. According to JD’s 2014 data report, Huang Gang, a small town located in central China, received the most orders purchased from a different city. This indicates that consumers who live in the first- or second-tier
12.3%
cities frequently purchase products online for their relatives who live in different cities.
experienced. This desire is reflected in consumer behaviours, as parents spare no expense to provide their children and grandchildren with products and opportunities that they were denied in the past. Although this group spends lavishly on younger generations, they are often unwilling to spend on themselves.
becoming parents. The offspring of the ‘first generation’ only children are the ‘one mouth, six pockets’ consumer. In other words, a large number of today’s children enjoy the doting attention and financial support of two
parents and four grandparents due to being the sole heir of the family. China’s one-child policy has created a financially secure youth with more spending power than any other previous generation.
Chinese Online Consumer Behaviour Towards Australian Products
13
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Chinese Online Consumer Behaviour Towards Australian Products
YOUR TRUE TARGET MARKET IN CHINA Although the size of Chinaâ&#x20AC;&#x2122;s middle class has grown in the last decade, they earn less than their middle class counterparts in Australia. As shown in Figure 6, only 5.7 per cent
of Chinese Internet users earn over RMB 8,000 per month, equivalent to AUD 410 per week. In comparison, the average Australian adult employed full-time earns AUD 1,453.90 per week .
The lower cost of living in China compared to Australia must be taken into account when analysing this disparity.
Figure 6 The Monthly Income of Internet Users in China, China Internet Network Information Centre (CNNIC), 2014 No Income <500 500 - 1,000
2.2%
15.2%
10.7%
1,001 - 1,500
1,501 - 2,000
2,001 - 3,000
18.8%
3,001 - 5,000
5,001 - 8,000
>8,000
8.1%
10.3%
20.2%
8.7% 5.7%
Chinese Online Consumer Behaviour Towards Australian Products
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Despite the income disparity, China has become one of the worldâ&#x20AC;&#x2122;s most sophisticated consumer markets, heavily skewed towards premium products.
the fiercest battleground for foreign brands in China. With higher salaries comes increased spending power and a penchant for premium goods.
Chinaâ&#x20AC;&#x2122;s middle class, those earning more than RMB 8,000 per month, equivalent to AUD 410 per week, are
However, personal income does not cause significant differences in country preference among online shoppers. As shown in Figure 7, of
the 3,000 online shoppers who have purchased an overseas product online in the last 12 months, those that earned above and below 8000 RMB per month followed similar preferences for different product categories.
Figure 7 Top 5 Country Preference of Different Product Categories, (Income) Survey Result Top 5 Country Preference - Electronic Products
US
Japan
Korea
Europe
Hong Kong 0%
5% Less than $8,000
16
10%
15%
20%
More than $8,000
Chinese Online Consumer Behaviour Towards Australian Products
25%
30%
35%
Top 5 Country Preference - Red Wine
Europe
UK
US
New Zealand
Australia 0%
5%
10%
15%
20%
25%
30%
35%
More than $8,000
Less than $8,000
Top 5 Country Preference - Health Supplements
US
Europe
Australia
New Zealand
Japan 0%
5% Less than $8,000
10%
15%
20%
25%
More than $8,000
2015 Chinese Online Consumer Behaviour Toward Australian Products
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Top 5 Country Preference - Cosmetics
Korea
Japan
US
Europe
Hong Kong 0%
5%
10%
15%
20%
25%
More than $8,000
Less than $8,000 Top 5 Country Preference - Organic Food
New Zealand
Australia
US
Europe
Japan 0%
5% Less than $8,000
18
10%
15%
20%
More than $8,000
Chinese Online Consumer Behaviour Towards Australian Products
25%
30%
35%
PROFILES OF REAL ONLINE SHOPPERS Chinese online consumers vary greatly, and as a result, there is no ‘average’ online consumer. Based on cluster analysis from survey results, we have identified three
Xiao Qiang is a 19-year-old only child. As a recent high school graduate, he does not have any personal income and receives financial support from his parents. Xiao Qiang often shops for himself online. He also orders gifts online for his multiple girlfriends and helps his parents make online purchases using his account. He rarely watches television. Instead, he prefers to spend his leisure time playing computer games and using social media on his computer and mobile. He follows more than 200 celebrities on his Weibo account, uses WeChat every day to connect with his friends and family, and uses Renren to keep in touch with his classmates. He enjoys being fashionable, jumping on the latest trends and meeting new people. He has downloaded more than 80 apps onto his smartphone.
key groups of Chinese online consumers. We have characterised these into three distinct personas:
Jing Jing is a 35-year-old woman who loves travelling and has vacationed abroad multiple times. She has no children and lives with her husband in one of China’s second-tier cities. After completing her Diploma of Accounting 10 years ago, she found a job at an accounting firm and now earns RMB 5,000 a month. She also manages her husband’s income of RMB 15,000 per month. Jing is a bargain hunter and enjoys shopping online because she can always buy products at a lower cost. She is very concerned about pollution in China, and as a result, has purchased many health supplements online for her husband. Jing Jing’s parents aren’t computer literate, so she buys things for them online and asks stores to deliver them to her parents’ home.
Anna Wong is a 29-year-old trying to balance time with her newborn and developing her career as a marketer. She completed a degree in marketing a few years ago and now earns over RMB 8,000 per month. Her parents moved into her home a few weeks ago to help Anna and her husband look after their baby. As a working mum, Anna has little spare time to visit shopping malls. She finds shopping online much more convenient. She buys everything online, including groceries, milk formula, cosmetics and business shirts for her husband. A few months ago, she bought a sofa and dining table for her parents and had the furniture delivered directly to her parents’ home. Online shopping is not a hobby for Anna, it’s a lifestyle that she can’t imagine living without.
Chinese Online Consumer Behaviour Towards Australian Products
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PREFERRED AUSTRALIAN PRODUCTS Australiaâ&#x20AC;&#x2122;s image is iconic around the world. Australia is recognised by Chinese consumers as having a clean and green environment with good quality products and brands. This healthy and natural image benefits numerous Australian industries, particularly food, supplements, milk powder and cosmetics. The taste preferences of online consumers in China is shaped by Chinese geography, traditional values, as well as domestic availability in China. However, China cannot be treated as a homogenous population. Each of Chinaâ&#x20AC;&#x2122;s 34 provinces and regions has a distinct culture and, as such, different taste preferences.
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Chinese Online Consumer Behaviour Towards Australian Products
HOW CONSUMERS LEARN ABOUT OVERSEAS PRODUCTS Chinese online shoppers use a range of methods to find information on overseas products. As shown in Figure 8, the most popular channel
for overseas product knowledge was e-marketplaces (58 per cent). Friendsâ&#x20AC;&#x2122; recommendations (46 per cent), Chinese search engine presences
(40 per cent) and official Chinese websites for brands (39 per cent) were also popular sources of product information.
Figure 8 Channels where Online Consumers Obtain Overseas Product Knowledge, Survey Result Shopping Sites Friends Search Engine
46%
40%
Brandsâ&#x20AC;&#x2122; Official Chinese Website
Magazine
35%
Social Media
34%
TV Program
Newspaper
Others
58%
39%
31%
14%
5%
Chinese Online Consumer Behaviour Towards Australian Products
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THE MOST PREFERRED AUSTRALIAN PRODUCTS Australia has a reputation in China as a country with safe and natural products regulated by strict food and product safety guidelines that ensure high quality. This image has particularly advantaged the food
and health supplement industries in Australia.
(26 per cent) were the most preferred Australian products among 3,000 Chinese survey respondents.
As shown in Figure 9, milk powder (47 per cent), food (44 per cent), supplements (39 per cent), skincare (30 per cent), and fruit and seafood
Only 20 per cent of those surveyed would consider purchasing wine from Australia.
Figure 9 Australian Products Consumer Preference, Survey Result
Milk Powder
Food
Supplement
Skincare
Fruit / Seafood
Apparel
Red Wine
Electronics
Bedding
Others
0%
22
5%
10%
15%
20%
Chinese Online Consumer Behaviour Towards Australian Products
25%
30%
35%
40%
45%
50%
Although Figure 9 displays consumer opinions, Figure 10, which shows the most searched Australian products on e-marketplaces Tmall and Taobao in July 2015, reflects online shopping activities to give a detailed breakdown of the most searched
Australian items. Australian suppliers are particularly well-placed to capitalise on demand for health and beauty products, as shown by analysis of search keywords on Tmall and Taobao in July 2015, where the keyword “Australia” was
part of the search term. Figure 9 shows that supplements, skincare, dairy and pharmaceutical products, which contributed to 71 per cent of the overall search volume, were the Australian products most sought after by China’s online shoppers.
Figure 10. Keywords Product Categories on Tmall & Taobao containing ‘Australia’, Taobao Datacube Others 8%
Supplement 31%
Apparel 4% Beverage 7%
Food 9%
Pharmaceutical 11%
Dairy 13%
Skincare 17%
Chinese Online Consumer Behaviour Towards Australian Products
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By looking further into the breakdown of the most searched Australian food items on Tmall and Taobao, as Figure 11 shows, seafood (26 per cent), snacks/confectionary (22 per cent) and honey (18 per cent) were the most sought-after Australian food products by Chinese online shoppers. This was followed by oatmeal (10 per
cent), nuts (8 per cent), beef (7 per cent) and fruit (3 per cent). Dairy products and beverages were not included in Figure 10, as these have their own food categories within Taobao and Tmall analysis in Figure 11.
Figure 11 Taobao & Tmall Keyword Search Contains â&#x20AC;&#x2DC;Australiaâ&#x20AC;&#x2122; for Food Products, July 2015 Fruit 3%
Seafood 31%
Others 6% Beef 7% Nuts 8%
Oatmeal 10%
Honey 18%
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Chinese Online Consumer Behaviour Towards Australian Products
Snacks 17%
COMPETITIVE LANDSCAPE It is vital to understand the strongest competitors that Australian businesses face in China. In the past, some businesses have attempted to rely on the ‘Australian made’ label to attract shoppers and retain them as loyal customers. However, the leading countries
in some of the largest product categories online reveal much more is needed than simply a country of origin to become a preferred retailer. Baidu search volumes of six country names (UK, US, New Zealand, Canada, Chile and Australia) were compared from 2011 to 2015.
As shown in Figure 12, Australia is the second-most searched country name, accounting for 21 per cent of country searches from 2011 to 2015. This demonstrates the online population in China is actively searching for information related to Australia.
Figure 12 Countries by Search Volume % in Baidu, Baidu Jun 2011 – Jun 2015
US
Australia
UK
Canada
New Zealand
Chile
0%
5%
10%
15%
20%
25%
30%
35%
Chinese Online Consumer Behaviour Towards Australian Products
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Chinese internet users are increasingly searching for Australia online, which demonstrates China’s awareness and knowledge of Australia is growing.
Search volumes for Australia over the same six-month period were analysed from 2011 to 2015. As shown in Figure 13, the search volume index of the
keyword ‘Australia’ has grown steadily. This number is set to climb after the signing of the China-Australia Free Trade Agreement.
Figure 13 Australia by search volume in Baidu, Baidu Index, 2011 to 2015 12000 10000 8000 6000 4000 2000 0 2011
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2012
2013
Chinese Online Consumer Behaviour Towards Australian Products
2014
2015
AUSTRALIAâ&#x20AC;&#x2122;S KEY COMPETITORS Australia faces strong international competition on Chinese e-marketplaces. The strongest competitors vary according to different product categories, as shown in Figure 14.
Figure 14, Top 5 Country Preference of Different Product Categories, Survey Result Top 5 Country Preference - Electronic Products US Japan
Hong Kong
45%
With the latest technologies usually released first in the US or Japan, it is unsurprising these countries dominate the electronics market in China.
25%
Korea Europe
The US was the most preferred country for electronic products (64 per cent), followed by Japan (45 per cent) and Korea (23 per cent).
64%
19% 17%
Top 5 Country Preference - Red Wine Chinese online consumers still prefer Europe as the source of their red wine, with 58 per cent noting they preferred wine from the region. This was followed by the UK (33 per cent), US (22 per cent), Australia (19 per cent) and New Zealand (18 per cent). French wine has traditionally been associated with luxury status and sophisticated palates. However, wine drinkers in China are increasingly diversifying their tastes and are becoming more interested in sampling new world wines, such as those from Australia.
Europe UK US Australia New Zealand
58%
33% 22% 19%
18%
Chinese Online Consumer Behaviour Towards Australian Products
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Top 5 Country Preference - Health Supplements The US was the most preferred country for health supplements (47 per cent), partly owing to its position as an innovator in supplement consumption, offering a wide variety of products. Europe (31 per cent) and Australia (28 per cent) were second and third respectively. Australia and New Zealand have positioned their supplements as natural products â&#x20AC;&#x201C; an image that complements the ideals of Chinese herbal medicine.
47%
US
33%
Europe Australia
28%
New Zealand
27% 22%
Japan
Top 5 Country Preference - Cosmetics Korean television dramas, Korean pop music, Korean celebrities, and as a result, Korean beauty trends, are growing in popularity in China, allowing South Korea (72 per cent) to become the most preferred country for cosmetics. Second-placed Japan (41 per cent) and third-placed US (25 per cent) were also popular.
Korea
Japan
41%
25%
US
23%
Europe
19%
Hong Kong
Top 5 Country Preference - Organic Food New Zealand is the most preferred country for organic food (54 per cent), followed by Australia (38 per cent) and US (30 per cent). New Zealandâ&#x20AC;&#x2122;s free trade agreement with China was implemented seven years before the China-Australia Free Trade Agreement, and as a result, Chinese consumers are more familiar with New Zealand organic food products.
New Zealand
US Europe
Chinese Online Consumer Behaviour Towards Australian Products
Australia
Japan
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38% 30%
29% 16%
54%
72%
WHY CHINESE BUY OVERSEAS PRODUCTS Chinese consumers are willing and eager to buy overseas products. As shown in Figure 15, the most important reason for Chinese consumers to buy overseas goods instead of domestic goods was high product quality. Brand recognition and high safety standards were also important.
Female online shoppers are more influenced by friendsâ&#x20AC;&#x2122; recommendations compared to male online shoppers. Males were more concerned with value.
Figure 15 Reasons for Buying Overseas Products, Survey Result
High Brand Recognition 61%
Peers Influence
58%
29%
42% 41%
37%
Female
Good Safety Standard
36% 30%
Male
62% 61%
Good Value
High Quality
Chinese Online Consumer Behaviour Towards Australian Products
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PRODUCT QUALITY IS THE KEY DRIVER As shown in Figure 16, the most important factor that influenced consumer decision-making was product qualityâ&#x20AC;&#x201D; 83 per cent of participants noted this was extremely important, followed by authenticity (72 per cent). The ability to refund products was also an extremely
important factor (53 per cent) for Chinese online consumers. In contrast, price (18 per cent) was the least important factor that influenced the purchase of an overseas product online. This reflects a financially secure consumer, who is less
concerned about finding a bargain as they have the resources to spend on superior items.
Figure 16 Consumer Consideration Factors for Purchasing Overseas Products Online, Survey Result Product Quality Authenticity Refundable Payment Convenience Brand Recognition Shop Reputation Delivery Time Customer Service Pricing Packaging 0%
10%
20%
30%
7 (Extremely important)
30
40% 6
Chinese Online Consumer Behaviour Towards Australian Products
50% 5
60% 4
3
70% 2
80%
90%
100%
1 (Not at all important)
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Chinese Online Consumer Behaviour Towards Australian Products
YOUR DIGITAL STRATEGY Chinese online shoppers are unique, highly selective, and increasingly technology-savvy. With fierce international competition in all product sectors, Australian businesses
require data-driven solutions to successfully reach Chinese online consumers in the fast-changing digital environment.
There are three essential channels Australian businesses need to establish to reach Chinese consumers: Chinese website, social media and e-marketplaces.
Chinese Website (Branding)
Chinese Social Media (Retention)
E - Marketplaces (Acquisition)
BRANDING A Chinese website acts as an official outlet of information for your brand and its products, guarding against counterfeits and unauthorised resellers. A Chinese language website with a .cn domain name and a state-issued ICP license will not
32
only be easier and faster for Chinese consumers to view, the mandatory license will assure consumers of brand authenticity. Strong and consistent branding throughout a Chinese website is
Chinese Online Consumer Behaviour Towards Australian Products
important for businesses as they cannot rely solely on being Australianmade to attract consumers to their brand. Brands can use this website to show their authorised distributor information.
RETENTION Chinese social media platforms WeChat and Weibo can transform past consumers and potential buyers into loyal fans. The social media platforms connect your brand to fans instantly, building your brandâ&#x20AC;&#x2122;s reputation, creating meaningful conversations,
detecting and monitoring industry trends, and also serving as a customer service tool. The best social media posts are those that are not only informative, but also entertaining. For example, fans can
look at exclusive product images, listen to your brandâ&#x20AC;&#x2122;s music soundtrack, view behind-the-scenes videos, play interactive games and shop from your latest products, just from social media.
ACQUISITION Australian businesses can enter China via various e-marketplaces such as Tmall Global and JD Worldwide.
Businesses can act as a supplier or open their own flagship store. Finding an appropriate online distributor
through e-marketplaces is a lowcost but highly-effective preliminary e-marketing strategy.
Chinese Online Consumer Behaviour Towards Australian Products
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WHERE TO FROM HERE No matter which way you choose to enter this market, a data-driven approach is the key to success. It helps you bypass threats, identify opportunities, and establish successful strategies. Think China aims to establish collaborative and productive business partnerships with all our clients. We achieve this by constantly, gathering, defining, and analysing
intelligence on products, customers and competitors and distributing this valuable data to all our customers, enabling them to make clear and informed decisions in regards to both marketplace threats and opportunities. The behaviours of Chinese consumers towards Australian goods provide great insights into an exciting market for Australian businesses
and exporters. To make the most of businesses opportunities in China, Australian enterprises must continue to monitor the Chinese online consumers and their shopping habits as the market grows and matures. We hope this white paper can provide some essential information to assist Australian businesses make informed decisions on beginning their journey into China.
ABOUT THE AUTHORS
BENJAMIN SUN
JOHNNY WONG
CHARMAINE WONG
Benjamin is a digital marketer, researcher and co-founder of Think China, with extensive knowledge in Chinese digital marketing. Benjamin works closely with research institutes in Australia, undertaking his doctoral degree at the University of Sydney. Benjaminâ&#x20AC;&#x2122;s main research interest is the Chinese digital landscape and online consumer behaviour. He helps many clients conduct and analyse market research to give them the strategic intelligence they need to make smarter decisions.
Johnny is a data specialist and co-founder of Think China. He has assisted numerous Australian and foreign clients achieve success in their online ventures, with cloud computing solutions, data-driven insights and website optimisation strategies tailored to the Chinese digital landscape. He enjoys sharing his real world experience with marketers, decision makers and business owners, to help them improve their services and acquire, engage and retain more customers.
Charmaine is a business writer and business marketing coordinator at Think China, with a passion for Australian and China trade and investment. She has published many articles containing innovative ideas and fresh perspectives on matters affecting Australian businesses operating e-commerce stores in the Greater China region.
Chinese Online Consumer Behaviour Towards Australian Products
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Chinese Online Consumer Behaviour Towards Australian Products