Rod Arenas speaking at the November 2016 FoodLegal Imports and Exports Symposium in Sydney

This report was written by Rod Arenas, Manager of Market Development at Food Innovation Australia Limited (FIAL). It was compiled as a summary of his presentation at FoodLegal’s Import and Exports Symposium held in Sydney on 22 November 2016.

Australian food and agribusiness exports to China have nearly doubled from 2010 to 2015 to AUD $9 Billion.

The Chinese Government policies are designed to cement China as a global e-commerce leader. In line with China’s transition from an investment-heavy growth plan, towards a more consumption-driven model. The speed at which the Chinese e-commerce industry has grown in the past ten years has come as a surprise to many.

In 2000, China had yet to develop any e-commerce applications and only had 2.1 million internet users. Payment systems and physical delivery mechanisms to facilitate the development of e-commerce transactions were well-developed in other markets but were simply lacking in China.

A rapidly growing environment

Fast forward to 2015, Chinese internet users are quickly approaching 632 million plus, with the Chinese government target to connect 1.2 billion people to the internet by 2020, which is 85 per cent of the population.

These trends and others are fundamentally re-shaping the ways Chinese consumers purchase goods and services, especially the growing middle-class that is expected to expand from 80 million to 180 million people, by 2022 the upper middle class will account for 54 per cent of all households. No matter how you slice the numbers, trends or forecasts, it’s clear that e-commerce is booming in China.

Chinese platforms underpinning the rise of online transactions

Chinese home-grown platforms, which underpin the rise of on-line transactions, have increasingly adapted to deliver Chinese consumer products and food from around the globe. Increasingly there is a need to invest in both supply chain and social media and mobile devices because of the important role they play in driving demand for products and services.

Alibaba’s 11.11 Singles-Day Online Shopping Festival is an example of China’s consumer force. Double eleven is the largest online shopping day around the world.

On the 11th of November 2016, a new sales record was set of USD $17.8 billion (RMB 120.7 billion). A 32 per cent increase on LY sales, although a slowdown from previous years’ percentage increase.

Key facts and figures

Some interesting facts and highlights about on-line sales into China:

• 82 per cent of all purchases were made on mobile phones
• 120,000 payment transactions processed per second (via ALIPAY at peak)
• 175,000 orders processed per second (via Alibaba at peak)
• 37 per cent of buyers bought from international brands
• 235 countries & regions involved in selling into china
• Top 5 countries (for on-line export transactions into China) – Japan, USA, South Korea, Australia & Germany
• Total parcels delivered by Alibaba – 657 million More than 50 per cent of the world’s most valuable brands and 75 per cent of the world’s most valuable consumer brands participated in the Alibaba 11-11 global shopping festival in 2016.

Outstanding numbers

Statistics from Alibaba show that millions of goods offer discounts, and some may be tax free and/or offer free delivery.

Other websites the likes of JD.com and VIP.com have shown as much as 50 per cent growth over previous years. In total including other sites 1.05 billion parcels were delivered during the Alibaba 11-11 global shopping festival on 11 November 2016.

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