More and more New Zealand brands are eyeing China's online market, but instead of fighting alone, they now do it collectively as a consortium and are promoted with the help of the government.
With the launch of the New Zealand Country Flagship Store last Wednesday on Tmall Fresh under China's e-commerce giant Alibaba, an array of high-quality kiwi food products have been put at the fingertips of Chinese consumers and sent to their dinner tables from a country 7,000 miles away.
With a few taps on the Tmall mobile homepage, Chinese consumers, whose appetite for high-end imported food products is booming with the rise of discretionary income, can browse and select from an assortment of New Zealand food products.
The flagship store is a joint venture between Tmall Fresh and the New Zealand Food Basket Ltd., which comprises of 18 of the country's most-reputable food and beverage brands.
Nicola O'Rourke, chairperson of the consortium, said the opening of the flagship store offers these brands a direct connection to Chinese consumers.
"It will significantly improve our reach and shorten the supply chain in a way that each brand couldn't achieve alone," she said.
According to New Zealand Food Basket, an initial batch of nine brands, including Fiordland Lobster, Vogel's, Rockit and Oha Honey, will begin sales through the online store last week, with another batch of nine to begin sales on Tmall in June.
The discussion about opening a dedicated New Zealand flagship store on Tmall Fresh began around a year ago with the New Zealand Trade and Enterprise, said Maggie Zhou, Alibaba's managing director for Australia and New Zealand, adding that talks were based on a shared vision of boosting Chinese consumers' awareness of premium food products from New Zealand.
Moreover, by increasing the brands' recognition in China, it will help participating New Zealand companies gain greater influence over the positioning, pricing and distribution of their products in this key market, Zhou said.
"It's no secret that even big, successful New Zealand companies can struggle to get brand recognition on Chinese e-commerce platforms," said Lewis Road Creamery Founder Peter Cullinane, adding, "A collective approach, with Alibaba's backing, is a huge opportunity."
As China's biggest e-commerce operator with nearly 700 million monthly active users, Alibaba's online marketplaces are often foreign brands' preferred gateway to China.
The result of a targeted-promotion test to predict the success of the New Zealand Country Flagship Store showed Tmall Fresh received orders for 1,200 cases of New Zealand apples in two minutes, six times more than normal monthly sales of the same product, according to Alibaba.
Alibaba is the world's largest retail e-commerce company. In the year ending Sept. 30, 2018, 636 million consumers purchased products and services through Alibaba Group's China retail marketplaces, the company's statistics showed.
Sheng Pang, CEO of Juplus Digital, a digital marketing agency based in Shanghai, said digital continues to be the most effective marketing channel in China, as internet is where most Chinese audiences find or engage with brands.
"It's by far the most effective way to drive brand growth in China," Sheng told the China Digital Marketing Conference held in Christchurch earlier this month.
He noted that despite warnings of a China slowdown, 79 percent of brands surveyed plan to increase digital ad spending in China in 2019, and digital is relatively more efficient and measurable than traditional media channels.
China has been New Zealand's largest trading partner since 2013. According to the Chinese government, two-way trade witnessed a 14-percent increase on a year-on-year basis.
New Zealand is the first developed Western economy to sign a Memorandum of Understanding on the Belt and Road Initiative with Beijing. This week, a business delegation led by New Zealand Trade Minister David Parker is attending the second Belt and Road Forum for International Cooperation in Beijing.
Increasing presence of alipay in New Zealand
Besides the collective staging of famous New Zealand brands on Tmall, about 3,300 kiwi businesses have joined a Christchurch Airport project to be part of Alipay, the mobile payment and lifestyle platform under Alibaba, since the cooperation was launched two years ago.
Alipay is a smartphone app that can be used to pay for everything from street food to luxury merchandise all over the world, and is a valuable marketing tool for the businesses using the platform.
By taking up Alipay initiative, kiwi businesses can better engage with the large numbers of Chinese travelers visiting New Zealand, along with the 170,000 Chinese residents living in New Zealand, according to the Christchurch Airport who runs a "South" initiative in partnership with merchants and tourism and economic development agencies around New Zealand.
"Alipay is a great example of Chinese ingenuity. Users can look up places to stay or eat and book activities before they leave China, businesses can offer them special discounts. While they're here users receive notifications on their smartphone when they're near any business having special offers to Alipay users," said Christchurch Airport's Director of the Alibaba Project Ken Freer.
The cooperation is to make it easier for Chinese visitors to book services and shop while they are in New Zealand, then keep ordering kiwi-made items after they return home, Freer said, adding the focus of the partnership is to create a better experience for Chinese visitors in New Zealand and to use Alibaba apps to create, capture and add value for New Zealand's small and regional businesses, using tourism as the basis for the first interaction.
Launched in 2004, Alipay currently serves over 1 billion users with its local e-wallets partners. Over the years, Alipay has evolved from a digital wallet to a lifestyle enabler. Users can hail a taxi, book a hotel, buy movie tickets, pay utility bills, make appointments with doctors, or purchase wealth management products directly from within the app. Alipay's in-store payment service covers over 50 markets across the world, and tax reimbursement via Alipay is supported in 35 markets.
Alipay works with over 250 overseas financial institutions and payment solution providers to enable cross-border payments for Chinese traveling overseas and overseas customers who purchase products from Chinese e-commerce sites. Alipay currently supports 27 currencies.
A 2018 Nielson report on mobile payment trends for Chinese tourists found that 32 percent of overseas transactions by Chinese tourists are made via mobile, surpassing cash for the first time. It also found that of the 1,244 overseas merchants surveyed, nearly 60 percent of those that adopted Alipay saw a subsequent growth in both foot traffic and revenue.
About 342,000 Chinese holidaymakers came to New Zealand in 2018 and 54 percent of them were free independent travelers, meaning they organized their own holidays, statistics show.
"Christchurch Airport, and more broadly the South Island of New Zealand, are positioning themselves for significant growth that will come at the hands of the lucrative Chinese tourist market," said Country Manager of Alipay for Australia and New Zealand George Lawson.
By enabling Alipay, it's possible to break down payment barriers and create a seamless shopping experience, Lawson said.
Freer of Christchurch Airport said the partnership initiatives are designed to both grow the South Island's economy and improve the experience Chinese visitors have when they come to New Zealand.
As well as Alipay, Christchurch Airport is working to boost New Zealand's presence on Alibaba's online travel agency, Fliggy.
Last week, a flagship store promoting tourism resources in partnership with the South Island's 13 regional tourism organizations was launched at the Fliggy online platform, which sells tickets, tours, and other tourism products directly to Chinese travelers on a large discount.
"In the third quarter this year, our focus will be on creating a flagship store on Alibaba's Tmall Global, enabling kiwi businesses to sell their products directly to Chinese consumers," Freer said, referring to a wider range of New Zealand products in addition to fresh kiwi food being sold at the Tmall Fresh store run by the New Zealand Food Basket Ltd.
"This is about using the power of the Internet to make it easier for New Zealand businesses, of all sizes, to trade internationally," he said.
Christchurch Airport is the international gateway to the South Island and welcomes almost seven million passengers a year. The airport is New Zealand's fastest growing entry point for Chinese visitors and welcomes a daily service to and from China's southern city of Guangzhou with China Southern Airlines.
China is New Zealand's second-largest international tourism market. Around 460,000 Chinese visitors came to New Zealand over the past year.
