As China ramps up the most lucrative New Year (CNY) on record for Chinese retail portals Australian business generally looks set to be scratching its head again wondering whether it underestimated the opportunity. What does it all mean and what’s the fuss about?
Gifting is very much entrenched in the Chinese culture and whether it’s cash or an item the gifting can mean any number of gestures from respect and tradition to incentive. CNY will traditionally see the sharing of the red envelope (a.k. red pocket), money gifts, exchanged among family although these days it can be seen in promotions throughout the year where billions of dollars in cash or coupons are exchanged among friends, relatives and customers. For CNY16, The UK’s Telegraph reported 2.3 billion red pockets sent and this number is expected to increase for 2017.
However, nothing compares to CNY which runs from about mid Jan to mid Feb and is all about travel, and gifting. In fact, the CNY period is regarded as the largest annual human migration and the Chinese National Tourism Administration expects over 340 million trips by Chinese for the period. The 3 major airlines are expecting to transport 100 million passengers compared to 22 million+ for an average calendar month.
Alibaba, the super colossal e-commerce platform of China, has provided some insights leading up to January 28. Their main e-commerce site, Tmall, claims to have sold 380 million New Year goods with transactions up 42% YOY. Taobao, another top commerce site recorded YOY increases of 36%. Retailers prepare early for the biggest trade period but Australian businesses may not have caught onto the this yet and we see little or no specific promotion to the Chinese market and what does occur is often far too late.
Apparel and cosmetics & accessories are the leading categories for online purchases this CNY. The other rising popular goods are maternal supplies including baby formula. This should not be any surprise. After all, these categories are the hot items for our own Chinese e-commerce entrepreneurs in Australia (a.k.a. Daigou) who number anything from 40,000 to 70,000 depending on the measure and definition. Daigou which loosely translates to “buying on behalf of” began for family and friends but has become one of the main retail channels for Australian products like vitamins and maternal products to the Chinese mainland.
Despite the good intentions though it appears Australians don’t quite understand the nuances of the Chinese commerce landscape. It centers around a unique mobile commerce and communication culture. The main platform where this all occurs is the Tencent owned Wechat app with almost 800 million active users per month. Wechat has no comparison in western culture. It is the main communication platform, a popular shopping and payment method and provides news and entertainment to hundreds of millions. Of course, there are other popular apps such as the Twitter-like Weibo, the dating app Momo and many more.
George Pesutto, Founder Director of Global Media Solutions Group says, “Advertising and communicating on Wechat and Weibo can be tricky and difficult for Australian companies especially without a Business Registration and ID in China but there are ways to make an enormous impact and reach literally millions of Chinese. Communicating in-language is just the start. Trust created by word of mouth, recommendations and perceived association is vital and one of the reasons Daigou is so effective against Australian online retailers. Using the Chinese social media platforms and Daigou in the right way helps build this familiarity and potentially instant trust.”
Chinese also prefer their familiar payment methods like Wechat Pay. We now see companies in Australia adopting these payment platforms. Chadstone Shopping Center, the largest in the Southern Hemisphere, recently showcased its impressive expansion and new Union Pay facility (another popular Chinese payment method) within the inflight magazine of China’s largest airline, China Southern.
Australian manufacturers and retailers should not be disappointed if they feel they missed the boat for 2017 as the perfect storm is not abating. China’s middle class urbanization is increasing and wages are rising while Chinese skepticism in its own quality control will take time to rectify meaning demand for anything genuinely “Australian made” will continue.
In fact, the Chinese interest in Australia continues to increase (as it does for Europe and arguably, USA). Across the year on average, wealthy Chinese travelers choose US and Europe as top destinations however Australia is a popular CNY destination ranking third only to US and Italy as a destinations outside Asia for the CNY period.
As for online shopping, Australia is the 3rd most popular online shopping source behind the US and Japan.
If CNY17 didn’t rank highly on retailer’s priorities perhaps they should give some thought to CNY18. Pesutto adds, “Prepare early, prepare to accommodate in-language inquiries and think about an effective advertising strategy. It doesn’t need to be hard with the right help. Choose a Chinese marketing expert rather than a Chinese expert.”
For comment or more information China Solution Marketing or GMS contact:
George Pesutto Founder Director Global Media Solutions Group Pty Ltd
T +61 3 8640 4031 E firstname.lastname@example.org W www.mediasolutions.global
Global Media Solutions Group Pty Ltd is an Australian based company that specializes in advertising, marketing and media in international markets. China Solution Marketing is the company’s specialist China service. Follow GMS on Facebook, Twitter, LinkedIn or Wechat
 China Southern Airlines, China Eastern, Air China.