China Business: Alibaba link opens new channels

Alibaba's Jack Ma and Trade Minister Todd McClay at a Chinese Entrepreneur's Club function in Beijing. Photo / Supplied

New Zealand exporters will be able to access the world's biggest group of consumers more easily following the signing of a memorandum of understanding between e-commerce giant Alibaba and New Zealand Trade and Enterprise.

The partnership is symptomatic of Alibaba Group's focus on global markets, both as destinations for its exports of goods and sources of imports for China's growing middle class.

The company opened offices in late 2015 in key markets like the UK, Italy, Germany, and France, with the goal of reducing barriers for businesses to sell to Chinese consumers.

The memorandum of understanding, signed during the Prime Minister's delegation to China last month, has similar aims for New Zealand.

"There will be increased communication and co-operation between NZTE and their key accounts, Alibaba in Hangzhou, and the physical teams on ground in Australia and New Zealand," says an Alibaba spokesperson.

This is expected to result in the formation of teams within Alibaba and NZTE, which will be tasked with assisting New Zealand businesses to navigate the e-commerce landscape in China.

For example, businesses can make strategic decisions about which Alibaba platforms to list products on. The group owns a number of ecommerce websites, all with different focuses. There is Alibaba.com, a business-to-business platform, or Tmall.com, a business-to-consumer platform, or one of its many other websites.

Whether it is selling to Chinese businesses or directly to consumers, the burgeoning spending power of the Chinese population drives the opportunity for online sales for companies based in New Zealand.

In the last quarter of 2015, Alibaba Group reported revenue of NZ$6.4 billion in its China retail marketplace, an increase of 35 per cent on the previous year. This amounts to more than one tenth of New Zealand's entire GDP in the same period (NZ$56.5b).

One major opportunity for New Zealand is its unique, high quality food products. "Alibaba's focus is bringing the best of the world to China," says the spokesperson.

"Chinese consumers have a strong appetite for New Zealand specialty fruits, seafood and fresh dairy products." Some proactive New Zealand producers are already selling seafood to China amounting to NZ$485 million last year.

The memorandum of understanding comes on the back increasing logistical support for businesses selling food products on Alibaba's platforms.

Earlier this year Alibaba announced that "Tmall has shortened the delivery time to less than a week, enabling food to be enjoyed fresh and opening up major opportunities for New Zealand's seafood businesses."

Alibaba's optimism about the region is evident in the appointment of two key players in to grow the number Kiwi businesses selling through its e-commerce platforms.

Maggie Zhou has been appointed managing director for Australia and New Zealand, while John O'Loghlen has been appointed director for business development in Australia and New Zealand.

Some 45 per cent of businesses responding to a 2014 survey by Export New Zealand indicated that regulatory and non-tariff barriers affected their ability to export.

These businesses will be hopeful that the memorandum of understanding, and the assistance it promises to bring, could be the key to accessing the ever-growing Chinese consumer market.