While many foreign brands have traditionally dominated Australian shopping aisles, Australian brands are embracing Chinese demand for Australian-made products. Here are five tips on cracking the Chinese market from one such business exploring this growth opportunity.
From the suitcase trade to daigous, China’s 1.4 billion population continues to seek Western-made products. This is not just limited to baby formula and cereal brands; vitamins, supplements and other food brands are also experiencing increasing demand.
Australian-owned Slim Secrets was founded in 2005 by Sharon Thurin, who saw a gap in the market at that time for healthy, convenient snacks that were designed as everyday lifestyle products.
The business sells snack products (protein bars, balls, cookies, 'Puds' and shakes) through a large number of retail outlets in Australia, as well as in 10 different countries around the globe – with China among its biggest opportunities.
Together with son Jamie, Sharon participated in Australia Week in China earlier this year, from which she says the business garnered a great deal of credibility and enhanced its growth potential, at a time when Chinese demand for Australian health and wellbeing products appears boundless.
“The trust and reputation of Australian health products means that the Chinese consumer desires these certain products. As Australia has a limited market for these types of brands to thrive, companies need to look outside Australian borders,” says Sharon.
Nevertheless, there are significant hurdles to entering the Chinese market that need to be considered, according to Sharon.
Her five tips for other businesses looking to seize this opportunity are:
1. Understand the cultural differences
“[It's] easy to overlook in the chase of a business opportunity, however China operates very differently and it’s important to adapt to their way of doing business.
“From business card traditions to accepting the pace of business ... decisions take time – interactions are conducted very respectfully.”
2. Acknowledge product preferences
“Sizing and packaging is another factor to consider when entering the market. In our experience, the general population in China prefers more petite sizing for its food products and have stronger preferences for certain colours.
“This doesn’t mean you necessarily need to add more SKUs [stock-keeping units] to your business, however it may be an element you incorporate into new product launches.”
3. Get your pricing right
“It can be easy to get caught up in the moment and accept first offers of pricing. However, with so many on- and offline retailer platforms, pricing can vary significantly between them.
“You can literally destroy your brand through your pricing, so ensure you undertake your research and have consistent pricing across all selling platforms. Do not rush into these decisions.”
4. Research consumer tastes
“It is important to invest time into understanding the tastes of the Chinese consumer. Like product preferences, this many not necessarily mean an overhaul of your product lines, but a consideration for future product innovations.
“In our experience, we found a strong preference for berry flavours in China, as opposed to richer flavours like salted caramel that are currently popular in Australia.”
5. Get expert support
“Transitioning into a new market is not easy and it pays to engage the expertise of professionals who understand the market and have helped other Australian businesses enter China.
“We engaged with a consulting and strategy organisation that has helped some of Australia’s leading brands move into the market. It means they have the insights into what works and doesn’t, and what’s most relevant to ensure your efforts are highly efficient.”