Asia-Pacific

'Too good an oppportunity': Australian small businesses harnessing power of WeChat

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There are more than 300 million Chinese middle-class, with an annual disposable income of about $20,000. More and more of them are using technology and social media to transact.

When Catherine Cervasio started her organic baby skincare company in 1994, she slowly started exporting to markets like South Korea, Taiwan, Singapore, Hong Kong and part of Europe.

China wasn't on her mind until opportunity came knocking.

"I didn't really plan to export to China, my export journey from the beginning has been reactive," says Ms Cervasio.

Catherine Cervasio, Aromababy founder
SBS

"We actually started exporting around 20 years ago, so within a few short years of the business launching, and around 10 years ago we were approached by a gentlemen in China who was involved in gene technology and biotech, so he was in that health medical space, and he was actually looking for a product for his own baby, and he scoured the world looking for different brands and ended up approaching us and became our first distributor in China."

The internet as we know it today, was years away.

"There was no jd.com, there was no Alibaba, nobody knew who Jack Ma was, there was no e-commerce, even the web was in its infancy in terms of the way we look at it now for globalisation," says Ms Cervasio.

She built her brand by physically being in China.

"The model has been, a lot of ground work, doing the trade shows, lots and lots of networking, and providing these workshops which is what we're known for and little by little the brand became more and more well known in China, in these circles, so China's a massive market."

A lot has changed since then, the China-Australia Free Trade Agreement has helped to reduce barriers. So too has technology.

Mathew McDougall, Daigou Sales founder
SBS

"I was one of the early adopters of WeChat, because I had to be, because I was in the China space, but I find that WeChat is a part of my everyday communication," says Catherine Cervasio.

With no Facebook, Instagram or Twitter in the country, Mathew McDougall, CEO of Daigou Sales says WeChat is the most popular one stop shop for everything from voice messaging and text - to social media.

"It's actually used by 951 million people in China of which 50 million live outside of China use it, and three million people use it in Australia on a monthly basis."

"A business might use it simply to push out branding messages, another might use it to actually do HR and recruitment, another business might use it for customer service. It's completely adaptable to the environment the business is using."

He adds, that it's also a money transferring platform.

"You can pay your movie tickets, you can pay your gas bills in China, I even saw a chap on the street selling hot potatos on the street with a QR code, so it's completely ubiquitous in Chinese society as a way of payments," says Mr McDougall.

Customers at the first unmanned store opened by social media platform WeChat.
Customers at the first unmanned store opened by social media platform WeChat.
AAP

"WeChat started as a communication platform but Lunar New Year, we will see around 3.4 billion dollars of money transferred using "hongbaos" or red envelopes, it's much more than just communicating."

Jessica Bragdon, founder of organic cleaning product brand Koala Eco, uses a third party service to manage her products on WeChat in Mandarin.

"We felt our high quality products would resonate really well with Chinese buyers. In general Australian goods have a very strong reputation in China. It's too good an opportunity to pass up."

Vanessa Xing Australia China SME Association Vice President agrees.

"These are the opportunities existing in China for Australian SMEs; in the healthcare, aging care, tourists, food sectors. That's where and we can tap into and meet the middle class desire and satisfy their demand," says Ms Xing.

While technology is making it easier to do business, David Thomas, Australia China SME Association President says a multi-channel approach is always best.

"There is red-tape but actually our biggest challenge is building relationships on the ground, trusted long term relationships where a business opportunity can flourish. That's actually critical to success in China and of course e-commerce platforms and others create opportunities to bypass those relationships but i think people would tell you to be successful you need those relationships on the ground."

It's a sentiment which Aromababy's Catherine Cervasio shares.

"All we hear about in Australia is e-commerce and cross border trade but there is much more opportunity outside of that so yes, I believe a multi-channel approach is probably ideal. I think it's a lot easier for market entry into China now than what it was 10 years ago, but having said that, even the Chinese consumers are doing a lot of research before they make a purchase."

"My observation is that they actually will go into store and look what's in stores," adds Ms Cervasio.

"They'll research to see if that product is in fact available in Australian stores, so is it an existing brand and is it successful here, or is it just a made up brand to make up some of that Chinese buzz, and then they might go and buy it from a reputable e-commerce provider, but they do really rely on going into the stores and seeing and feeling the goods and then they compare prices."

While now might not be the best time to approach Chinese companies, with many organisations and manufacturers closed for the Lunar New Year celebrations, Ms Cervasio says it is a good time for any potential exporters to get prepared.

"For China, that means having all your intellectual property sorted, so it's not just your trademark in Australia, a lot of savvy Chinese might have registered your trade mark thinking they could be your business partner, so you need to make sure your trademarks are available and registered, you need to make sure they're registered in different language, so in Mandarin and Chinese characters as well, and you'll also need to have your WeChat handle and that includes your official WeChat account so you can actually use it to communicate on a corporate business level."

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