Emerging “new retail” in China how does it impact an Australia exporter

金融市场代写 Since early 2000s, the economic growth of China has been highly supported by the rapid increase in the investment. Similarly…

Introduction:

Since early 2000s, the economic growth of China has been highly supported by the rapid increase in the investment. Similarly, the investment share in terms of GDP has also increased to 46 per cent from 36 per cent in the last ten years. The Chinese government and authorities have focused on the fact that the investment share cannot remain sustainably in the recent levels and the household consumption has become quite important driver of growth with the development of the economy. Indeed, the household consumption share of GDP in recent years has become a little higher and it suggests that the rebalancing process has started with it. As the national economy of China has started to move towards the consumption driven growth of the country, the balance of the activities in different sectors in the country has been expected to change (Brewewer, 2007).

Particularly, the share of economy of the tertiary sector might increase further as well and the secondary sector’s share such as construction and manufacturing might decline because the same has happened with other economies during the development and growth of the economy. The Australian exports to China basically comprises of resources and specifically iron ore as well as coal and the manufacturing sector specifically production of steel which absorbs the major part of the export. The sector basically relies to a huge amount of investment and they are particularly retail market based investment (Dow, 2000). 金融市场代写

It can be stated that there is a shift in terms of the composition of the Chinese growth and it has significant and strong implication on the economic links of Australia with China.

The World Input Output Database has provided a brief of how the household consumption of China can be different from the Chinese investment with respect to the Australian exporters and the data specifically shows the domestic as well as international flows of products and services of 35 industries in the 41 regions for a total period of 15 years. The data shows that the investment is highly significant in the retail sector. The main aim of the report is to analyze the impact of emerging “new retail” in China and how does it impact on an Australian exporter.

The market: 金融市场代写

The economy of China has expanded by more than 7% in the year 2015. While the growth of consumer goods sector of China slowed down during 2014, the average annual growth of the economy of the country has been as high as 24.7% between 2010 and 2014. The retailers have continued to focus on the market as they have strong and positive potential and the development of the government plans to boost the domestic consumption and also increased household income by the end of 2020. Among the different retail products, the beauty and personal care products have achieved significant growth in China in the year 2014 because of the increase in the disposable income of the people and the growth awareness of the personal appearance and hygiene.

The data collected from the Euromonitor shows that the total retail sales of the makeup products and skincare products has reached to RMB142 billion and RMB21 billion in the year 2014 and they have achieved year-on-year growth of 8 percent and 9 percent respectively. Apart from the strong growth of the value across the board, the baby products, skincare products and other retail products and men’s grooming products have also achieved significant growth (Lu & Julian, 2008). As per the data by Euromonitor the skincare products of men has expanded by more than 9 percent in the year 2014.

The skincare products for baby are considered as the most popular result from the online search results of the skincare products.

Although, the retail market of China has a lot of potential for the Australian exporters but the competition in the market is also quite tough. Seizing the market share from the existing companies which have already developed strong presence in the market is considered as the most important barrier for the new companies in the market. 金融市场代写

The hypermarkets and departmental stores of China are considered as the major distributors of the retail products such as beauty and personal care products and they also target the premium products and mass products. The concept of online market has become an important distribution channel in the market and in the year 2014, the online sales of the retail products have become quite popular in China and it has also become the third most important distribution channel for the beauty and skincare retail products of the country (Julian & Yunus Ali, 2009). The online retail sales has started to increase to a significant level rapidly and it accounts for more than 15.5 percent of the total market share in the year 2014 which was only 5.3% in the year 2011 and only 0.1% in the year 2001.

The retail market of China has further developed due to the popularity of the home delivery services in the urban cities of the country.

And easy comparisons of the prices of the products along with the quality as well as the active engagement of the manufacturers and exporters in the emerging new channel which has influenced the rapid growth of the internet retailing for the beauty and personal growth products in the year 2014. 金融市场代写

The Chinese consumers are generally price sensitive when it comes to purchasing the apparel products And the online purchasing channels have provided a greater number of choices to the consumers compared to before. Presently, a huge number of customers prefer to purchase products from the online channels because the prices of the products are quite cheaper compared to the physical outlets (O’Cass & Julian, 2003). Apart from that a huge number of online retailers of China have opened their online stores and they have also strengthened their online presence. The increasing exposure of the international fashion trends and increase in the personal wealth of the people can bring strong demand for the luxury jewellery in the China. The category of jewellery in China is considered to become highly internationalized as well as the increasing number of multinational brands present in China.

In China, the first tier and second tier cities can contribute to the maximum sales and revenue to the consumer products sector of the country and there has been significant increase from the second tier as well as north western cities. 金融市场代写

The consumers in the cities are generally emerging groups who have higher incomes and they also enjoy better living standards which help them to purchase the luxurious products and services.

There are a number of factors present in the consumer market segment of China which can also influence the opportunities present for the Australian exporters. Australia has a green and clean environment as recognized by the local consumers and it has a significant number of popular brands producing high quality products and services. There are some Australian exporters present who have already been benefitted by the competitive nature of the market and the exporters are generally established supplier of different types of retail products such as baby care products, skin care products and hair care products (Tansu Barker & Kaynak, 2008). There are many Australian exporters present who have been benefitted by the growth of the retail apparel market of the country.

The food and the skincare safety is referred as one of the most important concerns among the Chinese consumers. 金融市场代写

The baby and children care products of Australia have been getting greater attention among different parents which have given green. And clean reputation of Australia. The Chinese people have higher level of disposable income present. And there is a concern regarding safety of the products used by the babies and that is the reason why the Chinese parents always prefer to buy expensive baby care products which have strong association with respect to quality and price (Cadogan, Cui, & Kwok Yeung, 2003). As a result, the Australian exporters have also benefitted by exporting the high quality baby care products to the Chinese market. And there are a number of Australian companies present that have been benefitted by exporting the baby care products to China.

In today’s environment, the Chinese consumers have become highly brand conscious. And they always prefer to purchase the premium quality consumer products. As mentioned above, the Chinese consumers have higher amount of disposable income, they are quite brand conscious. And they always prefer to buy the premium consumer products.

In this particular segment, the number of Australian exporters is quite high because there is a number of luxury 金融市场代写

And premium apparel brands present in Australia and all of them have strong business presence globally. So, they can easily export the high quality premium products to Chinese market (Brewer, 2011). The branded and imported products are always referred as a high quality product for the Chinese consumers. Apart from the popular and renowned fashion labels of the world, the fashion products which are of fine quality. And trendy in terms of style and design have started to attract the eyes of the consumers who belong to the mid-to-high level. It has provided the Australian fashion labels and the creative designers the potential and opportunities in the Chinese market.

In recent times, the Chinese government has developed a number of policies which is favourable for the Australian exporters. And the policies set by the government are mainly aimed at regulating the market for the imported products in China through the cross border e-commerce methods.The government of China has developed eight pilot zones for the cross border e-commerce import services. In case of importing the merchandise through the cross border ports do not need to pay regular value added taxes and import duties (Brewer, 2011). Instead of that they just need to pay a very small concessional postal tax. And different online players have focused into the cross border online businesses through different e-commerce channels either with the help of direct mail. Or other similar channels. Different exporters have also started offering different types of overseas cosmetic products.

Due to the above factors, there is a significant demand for the luxury and premium products in different categories.

The first category is skincare products having multi functions like whitening, moisturing, and anti ageing. The second category of product is maternity. And the baby care products along with men’s care products (Cadogan et al, 2001). The third category of product is make up and the colour cosmetics. The next category of products is hair care product and apparel and footwear. The last category of product is jewellery and unique as well as modern design. The exporters export different products in these categories to Chinese market due to the demand of the products in these categories in the market. 金融市场代写

There are a number of key challenges present too for the Australian businesses in China. Among them the first one is an increasing number of scams or the unqualified leads to the different Australian companies. In China, the number of scams faced by different exporters is increasing day by day. And due to this, the Australian companies are facing huge amount of losses in terms of exporting the products to the country.

The second thing is non-payment issues and due diligence and letter of credits etc. In many cases it is found that the Australian exporters do not get payment from the Chinese companies even after delivering the products to them. In most of the cases it is found that the companies need to wait for a long time to get the payment from the Chinese vendors. And sometimes they are issued credit notes and against which they do not get the payment.

The third factor is market access or product registration issues.

Often, the Australian companies need to face product registration issues in China because of the differences in terms of the standards of the products. And services between Australia and China and due to this, they often need to face legal issues in Chinese market (Rahman, 2003). In many instances it is found that the products exported from Australia are banned by the Chinese government. Another important issue which is faced by the Australian exporters in China is strong competition from the exporters from other countries. As the emerging retail market of China is an attractive area, a number of exporters from other Asian. And non-Asian countries also conduct business with the Chinese retail companies. Which make the competition among the different exporters from different countries stronger. 金融市场代写

There are many exporters present in the Asian countries such as Malaysia, Japan that provide the products to China at a relatively cheaper rates compared to Australian exporters. And due to this the Australian brands prefer to get products from these countries. Apart from that the logistics costs also become quite cheaper compared to the logistics costs of Australia. Another major issue in this regard is the tightening of the regulations. And the non-tariff barriers (Cadogan et al, 2006). The regulations set by the government of China in terms of the export and import between Australia. And China is quite strong compared to other countries and the Australian exporters often face problems with regard to this (Francis, 2013). Apart from that there is a strong issue present in China regarding the intellectual property and the trade mark barriers.

One of the major issues faced by the Australian exporters in terms of conducting business with the retail companies of China is the fluctuations of exchange rate.

The exchange rate between Australian dollar and the Chinese currency fluctuates quite frequently. And it becomes a major issue for the Australian exporters to export the different retail products to China due to the high costs of the products as well as logistics. There are some other issues present as well which are faced by the Australian exporters in exporting the products to China which include different types of language. And cultural barriers and increasing costs of doing business with Chinese companies such as property costs, marketing. And promotion costs and different types of operational costs.

金融市场代写
金融市场代写

There are some opportunities present for the Australian exporters of the retail market of China as well. For example, China has reduced the import duties on different consumer retail products which include garments, sneakers, boots, skincare products, cosmetics etc. The move can boost the imports and the other types of discretionary spending. And the Australian exporters can use this opportunity to develop their business further (Ghauri, Lutz, & Tesfom, 2003). China has also reformed the trade policies of the country which can be a great opportunity for the Australian exporters intending to enter into China.

Recommendations to the Australian exporters: 金融市场代写

There are some actions present which are needed to be followed by the Australian exporters in order to achieve success in the Chinese market. The first action which should be followed by them is that they need to get to know the market well. For example, they should visit the market before they are intending to enter. And establish a price range for the products they are planning to sell. It is another important factor to consider by the Australian exporters is that they should find a local partner or agent who will help them to establish the presence of the company in the market and test the market appropriately (Valos & Baker, 2013).

It is very important for the Australian exporters to invest in the market wisely. And they should find out the details of the market through different market analysis methods which will help them to identify the demand of the product in the market. The distribution channels of the Australian exporters. Or the companies with whom they are going to work should also be chosen quite wisely which can help them to establish their market appropriately.

Conclusion: 金融市场代写

The Australian exports to China basically comprises of resources and specifically iron ore as well as coal. And the manufacturing sector specifically production of steel which absorbs the major part of the export. The sector basically relies to a huge amount of investment and they are particularly retail market based investment. But, today, the Australian exports have also been a major factor for the growth of the retail market of China. Although, the retail market of China has a lot of potential for the Australian exporters. But the competition in the market is also quite tough. Seizing the market share from the existing companies which have already developed strong presence in the market is considered as the most important barrier for the new companies in the market.

The hypermarkets and departmental stores of China are considered as the major distributors of the retail products such as beauty 金融市场代写

And personal care products and they also target the premium products and mass products. In China, the first tier and second tier cities can contribute to the maximum sales. And revenue to the consumer products sector of the country. And there has been significant increase from the second tier as well as north western cities. The consumers in the cities are generally emerging groups who have higher incomes. And they also enjoy better living standards which help them to purchase the luxurious products and services.

There are a number of factors present in the consumer market segment of China which can also influence the opportunities present for the Australian exporters. In recent times, the Chinese government has developed a number of policies which is favourable for the Australian exporters. And the policies set by the government are mainly aimed at regulating the market for the imported products in China through the cross border e-commerce methods. There are a number of key challenges present too for the Australian businesses in China which they need to overcome through appropriate strategies and methods.

References: 金融市场代写

Brewewer, P. (2007). Psychic distance and Australian export market selection. Australian Journal of Management32(1), 73-94.

Dow, D. (2000). A note on psychological distance and export market selection. Journal of International Marketing8(1), 51-64.

Lu, V. N., & Julian, C. C. (2008). The Internet, strategy and performance: A study of Australian export market ventures. Journal of Global Marketing21(3), 231-240.

Julian, C. C., & Yunus Ali, M. (2009). Incentives to export for Australian export market ventures. Journal of Small Business and Enterprise Development16(3), 418-431.

O’Cass, A., & Julian, C. (2003). Examining firm and environmental influences on export marketing mix strategy and export performance of Australian exporters. European journal of marketing37(3/4), 366-384.

Tansu Barker, A., & Kaynak, E. (2008). An empirical investigation of the differences between initiating and continuing exporters. European journal of marketing26(3), 27-36. 金融市场代写

Cadogan, J. W., Cui, C. C., & Kwok Yeung Li, E. (2003). Export market-oriented behavior and export performance: The moderating roles of competitive intensity and technological turbulence. International marketing review20(5), 493-513.

Brewer, P. (2011). International market selection: developing a model from Australian case studies. International Business Review10(2), 155-174.

Cadogan, J. W., Paul, N. J., Salminen, R. T., Puumalainen, K., & Sundqvist, S. (2001). Key antecedents to “export” market-oriented behaviors: a cross-national empirical examination. International Journal of Research in Marketing18(3), 261-282.

Rahman, S. H. (2003). Modelling of international market selection process: a qualitative study of successful Australian international businesses. Qualitative Market Research: An International Journal6(2), 119-132.

Francis, J. R. (2013). The effect of audit firm size on audit prices: A study of the Australian market. Journal of accounting and economics6(2), 133-151.

Ghauri, P., Lutz, C., & Tesfom, G. (2003). Using networks to solve export-marketing problems of small-and medium-sized firms from developing countries. European Journal of Marketing37(5/6), 728-752. 金融市场代写

Valos, M., & Baker, M. (2013). Developing an Australian model of export marketing performance determinants. Marketing Intelligence & Planning14(3), 11-20.

Cadogan, J. W., Cui, C. C., Morgan, R. E., & Story, V. M. (2006). Factors facilitating and impeding the development of export market-oriented behavior: A study of Hong Kong manufacturing exporters. Industrial marketing management35(5), 634-647.

Klein, S., & Roth, V. J. (2013). Determinants of export channel structure: The effects of experience and psychic distance reconsidered. International Marketing Review7(5).

Lee, D. J. (2013). The effect of cultural distance on the relational exchange between exporters and importers: the case of Australian exporters. Journal of Global Marketing11(4), 7-22.

 
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