E-commerce driving China’s COVID-19 recovery

China’s recovery from the COVID-19 pandemic will be in large part driven by consumer activity across e-commerce platforms.

This was a key headline message from a webinar delivered as part of a Victorian eCommerce Network series by Global Victoria in partnership with Asialink Business. The webinar focused on how China is rebounding from coronavirus and is ready for business.

The event was moderated by Nick Henderson (Director, China Practice, Asialink Business) with welcoming remarks from George Di Scala (Deputy Director, International Market Development, Global Victoria) and featured the following speakers:

  • Tim Dillon – Commissioner to Greater China, State Government of Victoria
  • Michael Norris – Research and Strategy Manager, Agency China
  • Cathy Lu – Senior Business Development Manager, Australian Trade and Investment Commission (Austrade)
  • Tim Brown – Chief Business Officer, Health More

Tim Dillon mentioned parallels between China’s recovery from COVID-19 and SARS back in 2003 and noted that traditionally pandemics result in sharp economic decline but can be followed by a sharp recovery.

Following SARS for example, Chinese visitor numbers to Victoria quickly rebounded while in China this earlier pandemic was a catalyst for the emergence of online giants Alibaba and JD.Com, as millions of Chinese consumers and businesses were driven online to shop and sell.

Similarly, COVID-19 has triggered new levels of online activity with 10 per cent sales growth across the major platforms in the first quarter of 2020.

Markets are fragmented

Agency China specialises in e-commerce and marketing in China and Michael Norris – based in Shanghai – said online sales now represented about a quarter of all retail sales in China with numbers increasing across most categories. Cross border online markets are however fragmented, and he advised exporters to consider being across multiple platforms.

He said company data showed that COVID-19 had created new sales opportunities in categories such as health, wellness and beauty.

Mr Morris explained for example how the widespread use of face masks in China had elevated the role of eye beauty and face care to combat the effects of accelerated ageing and dry skin.

Coming out of lockdowns Chinese are also more focused on weight management and fitness, with increased demand for meal replacement products and supplements to aid exercise warm up and recovery.

There is also new demand for products that aid sleep and night-time rituals which has been linked to increased levels of anxiety and uncertainty.

Cathy Lu highlighted the wider demographic that had been conditioned to online shopping during the COVID-19 lockdowns, including increasing number of those aged over 45. These trends are sustaining as life returns to normal in the post-COVID-19 environment.

Livestreaming a must

The importance of digital marketing and customer engagement was emphasised and Ms Lu observed that almost no brand in China could succeed without offering livestreaming events for consumers, which were now an expectation. She cited an example of a recent online event that attracted 15 million consumers.

Ms Lu’s key message was that e-commerce was not a trend in China it was an essential component of doing business.

Health More is Australia’s leading cross-border e-commerce (CBEC) distributor of health and wellness products into China, Hong Kong, Singapore and Malaysia. Victorian brands make up 30-35 per cent of the company’s orders.

Tim Brown said the atmosphere around China had shifted quickly from uncertainty, to confidence and vigor and then to uplift. Business activity for Health More’s and its brand partners is up 20 per cent on the same period as last year.

Focus on healthy living

Mr Brown concurred that following COVID-19, 2020 would be the year of the healthy lifestyle in China with 80 per cent of Chinese consumers paying more attention to eating healthier. In the early stages of COVID-19, consumer focus was in the areas of protection and prevention and there had been increased demand for products such as infant formula, health supplements, immunity products and fresh foods.

Demand has shifted to a broader range of categories, including new products with strong emphasis on health, fitness and nutrition.

Mr Brown said Australia and New Zealand suppliers were well-placed to capitalise on increased demand in the health and wellness space with supply chains well-established – although logistics within China were presenting challenges.
 

Established by Global Victoria in 2016, The Victorian eCommerce Network (VeN) offers Victorian companies an opportunity to connect, collaborate and share knowledge with other like-minded businesses interested in taking advantage of global eCommerce opportunities.