Article:

The power of China’s digital landscape to drive growth for Australian businesses

25 October 2016

Dennis Lin , Strategic Adviser – M&A and China |

I had the pleasure of hosting an event with my industry colleagues about how Australian businesses can use the power of China’s digital landscape to realise their growth ambitions. By sharing insights and stories about what it takes to fully understand and leverage China’s digital landscape for business growth, we demystified the complexity and gave first-hand accounts of how to make it work.

To view the broadcast select a session (or two!) of interest to you below:

For me, the key takeaway message for Australian companies looking to do business in China was this - build an ecosystem that caters to various online needs. The impact of social media on business and Chinese consumer buying behaviour cannot be underestimated.

To put it into context, consider these statistics - there are 653 million active social media users in China, compared to 14 million in Australia; and there are 577 million mobile social media users in China, compared to just 13 million in Australia. The sheer scale of the consumer base is astounding, and businesses are using digital advertising in China to tap into it. In 2015, more than 50 per cent of media advertising in China was conducted online.

Yet, e-commerce still only represents approximately 11 per cent of the total retail sales in China. Imagine the future potential!

Navigating China’s unique digital landscape takes skill and clear market insight. The platforms we are familiar with here lose relevance in China and are replaced with bespoke online/social channels. Competition is also fierce. There are more than 70 million companies in China vying for attention, as well as rest of the world. In addition to competition, there are also regulatory issues. For example, unless your product type is on the ‘positive’ list issued by China Food and Drug Administration, it may be refused entry into China from as early as May 2017.

Despite these challenges, if you have doubts about China and the power of its consumers, rest assured that with the right support it can deliver great returns. By way of example, an Australian company had its EBIT increase ten-fold in less than one year. The Board commissioned a management consulting firm to find out why and the finding was that 90 per cent of the increase was due to Chinese interest in the brand in Australia and China, driven by e-commerce.

If you want to know more about how you or your company can break into China through e-commerce, or refine its current approach, please contact me. Through our connections with key players in China’s digital media and business communities, my team and I can help plan and execute a strategy to achieve your growth ambitions.