Alibaba sees Australian fresh produce as its next big opportunity for growth

Alibaba founder Jack Ma. Photo: Getty / File

The business world may be enthralled with Amazon’s moves to become a major supermarket player, but Chinese e-commerce giant Alibaba says it is already strides ahead and is opening up new ways for Australia food producers to access its more than half-a-billion customers.

Alibaba has been an important avenue for Australia baby formula and vitamin producers to access the Chinese market, through its Alibaba.com wholesale website and its direct-to-consumer site Tmall, but Maggie Zhou, Alibaba’s Australia and New Zealand managing director, said fresh produce now presented the greatest opportunity for growth.

Alibaba already sells some fresh products online and is pushing further into the category with its own supermarkets in China, opening 13 since 2015.

The company says it has tried to reinvent the supermarket experience at its Hema stores by removing the distinction between online and offline shopping, with shoppers using a smartphone app to make purchases and learn about products.

Each supermarket also serves as a fulfillment centre for online orders that can be delivered within 30 minutes.

“So if I’m an office lady, I can place an order after work and in 30 minutes the product is already in my home,” Ms Zhou said.

Phil Walter/ Getty Image

The supermarkets already sell Australian fruit, vegetables and milk, and Ms Zhou said demand was set to grow thanks to the speed of its home delivery service.

China is Australia’s largest food export market, selling more than $867 million of beef, $622 million of dairy products and $259 million of fruit and vegetables there last year, according to the Department of Foreign Affairs and Trade.

Ms Zhou said many Australian businesses did not fully realise the opportunity China presented.

“In China, only on our platforms we have 529 million mobile users, so it’s a huge opportunity,” she said.

“Australian businesses are a bit slow to adapt, so we need more education for those businesses to understand what the Chinese markets looks like, what the opportunities look like.”

Australia’s potential to become the ‘food bowl of Asia’

Much has been made of Australia’s potential to become the “food bowl of Asia”. Hong Kong-based business consultant Geoff Raby, an economist and former Australian ambassador to China, has previously noted the “clean, green” reputation of Australian food has huge appeal for the increasingly cashed-up Chinese.

Along with high-profile success stories such as Swisse Vitamins and A2 Milk, which have made millions selling to Chinese consumers, other companies such as Bellamy’s Organic and Blackmores have had a bumpier ride exporting to China.

Ms Zhou said Alibaba could help Australian exporters navigate the sometimes unpredictable Chinese regulatory environment: dairy producers, for example, were hit with new rules for importing baby formula last year.

“Always business begins first and then policy follows,” Ms Zhou said.

Alibaba does not release sales or growth numbers by country, but its total revenue jumped 60 per cent to the equivalent of $7 billion last year, while Australia was the fourth highest selling market during its Double 11, or “Singles Day”, shopping event last year.

There are about 1300 Australian brands already being sold on its platforms, and Ms Zhou said Alibaba did not necessarily need more Australian products, and the company was focusing on growing the existing brands’ profile through campaigns and marketing.

On Monday the Victorian government will announce Ms Zhou’s appointment as its first ambassador under a new trade strategy designed to help businesses, particularly small to medium enterprises, access the global market.

Trade minister Philip Dalidakis said Victoria’s first trade strategy in over a decade would drive trade and investment by working with partners like Alibaba.

This article originally appeared on the Sydney Morning Herald’s Business Day. Read the original here, or follow Business Day on Facebook.

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