Selling to China

With 1.3 billion people, the People’s Republic of China is one of the fastest-growing markets in the world, but selling online to Chinese consumers has been a challenge due to lack of online payment options for foreign merchants. The article describes Paymate’s China Payments service and Chinese-English shopping mall, Haiwaibao, launched on 11 June 2008 in Australia and China.

Dilip Rao, MD Paymate

On a trip to China last month, I spent time in Shanghai, a commercial centre with the largest urban population in the world – 23 million people! The city is booming with construction and giant cranes hover over The Bund, Shanghai’s beautiful avenue along the Huangpu river.

In Shanghai I caught up with Mr Christopher Wright, Deputy Consul General for Australia and Country Manager, PRC for The Australian Trade Commission (AUSTRADE). According to the latest Austrade/ABS research, 4,257 Australian businesses export goods to China – an increase of almost 12 percent compared to last year.

Many of these exporters have established local distributors to sell and deliver their products. However, Mr Wright thought there was an opportunity for many of them and other Australian companies to sell products online if the legal approvals (eg for food products) were in place. However, he thought a trusted Chinese payment method and a Chinese-language website would be critical to success.

Paymate had integated a payment service with Alipay, our partner in China, in April 2008. With 80 million registered clients, Alipay is the leading ecommerce payments provider, supporting China’s leading B2B portal (www.alibaba.com) and leading C2C auction platform (www.taobao.com) as part of the Alibaba Group.

Our new idea was to build a Chinese-English language shopping mall, so that Chinese buyers could search for and appreciate Australian products described in simplified Mandarin, while our own Aussie merchants could list and describe their catalogue in simplfied English! I briefed Mr Wright on www.haiwaibao.com, meaning ‘foreign treasure”, that implemented this very concept.

Austrade’s advice to us was that the following categories of consumer products might be of particular interest to Chinese consumers:

wool products like sheep skin, shoes, wool quilts, wool throws, etc
pet care or accessories (non-food)
cosmetics
fashion accessories
cute car accessory/ decoration items (eg stickers, wool car seats, etc)
small products suitable for unique gifts.

In Hangzhou, considered the most beautiful city in China (though another city called Suzhou might dispute this), I met with the CEO and key executives of Alipay.

Xiaofeng Shao, CEO of Alipay, spoke to me through an interpreter to warmly support our China Mall initiative. Alipay would direct their own clients to Haiwaibao via their own buyers’ forum pages, targeted emails and SMS marketing. What we needed to do was to bring quality Australian merchants with good value products to the mall.

We also agreed to make available ‘special offers’ from Australian merchants that could be promoted strongly to the Alipay client base of 80 million avid shoppers.

Several Australian merchants have already opted to list products on Haiwaibao, including:

Ken Done
Aboriginal Art Online
Mr Sheepskin
SasyNSavy
Nina’s Jewellery
Optimal Life
Natural Health Organics and
Steve Parish Publishing

Merchants will be able to list catalogues online, uploading high quality images, short and long descriptions, via an easy to use web interface. Paymate will arrange to have this content translated into culturally-sensitive, simplified Mandarin, for upload to the Chinese version of the same site. Payment via Paymate and Alipay is fully-integrated into the shopping cart and checkout process.

While shipments in retail quantities generally do not attract custom duties in China, some product categories may require regulatory or labellign approval. Austrade will assist all new exporters in assessing their products for suitability and also with the popular Export Promotion Development Grants. The Austrade website also has useful information on exporting to China. I have to say I am very impressed with the enthusiasm and level of support for Australian exporters at the Shanghai and Hangzhou offices of Austrade.

On June 11, Haiwaibao was launched simultaneously in Sydney, Australia and Hangzhou, China, with strong support from both Austrade and the NSW Department of State & Regional Development.

For details, visit: www.haiwaibao.com.