Australia Clings to China During Retail Crisis

The Australian retail industry is in crisis. Christmas trading was the lowest Australia has ever seen, major Australian brands Marcs, David Lawrence, and Oroton all went into administration last year, and major retailer Myer had a terrible January, with CEO Richard Umbers saying their once hugely successful post-Christmas stocktake sales experienced a significant downturn, seriously hurting their share price.

There are, however, major changes underway. Australian retailers and brands who are shifting their attention to Asia and, in particular, the cash-rich Chinese market, find themselves better placed to endure the current retail slump. Strategies include new e-commerce initiatives, adopting Chinese payment solutions, engaging with Chinese influencers, and even setting up physical stores in mainland China.

In Store Marketing

Chadstone Shopping centre in Melbourne’s east has rebranded itself as The Fashion Capital following a major renovation and the addition of 40 new retailers, including an international shopping zone that houses Cartier, Dior, Chanel, Gucci, and Louis Vuitton.

Chadstone has done a remarkable job of transforming itself into a must-visit destination for local and international Chinese shoppers, despite some pretty big challenges. Unlike city or suburban shopping centers, public transport to Chadstone is inconvenient, a good walk from the nearest train station. To address this challenge, Chadstone runs a free bus shuttle from Melbourne CBD, with free wifi.  

Last year Chadstone recruited a tourism manager to engage with local travel operators. They have a Chinese language website, Chinese speaking service and information staff, and most of the stores accept the most popular Chinese payment methods, with many vendors accepting UnionPay, Alipay, and WeChat Pay.

Chadstone does not have its own WeChat account yet, but one would certainly be a welcome addition, increasing engagement and driving more visits to the centre.

Payments

Australia is somewhat lagging behind in the adoption of Chinese mobile payments. Most Aussie retailers do not understand how prolific mobile payments are in mainland China, where not offering Wechat Pay or Alipay means certain retail death.

Both payment platforms have launched in Australia, but the fact they are offering the setup via multiple third-party players means that merchants are in a state of confusion as to how the system operates. Royalpay is one of the most aggressive and the earliest of the third party payment operators and is now working directly with several large merchants including Sydney’s Birkenhead Point and Melbourne Airport.

Fashion retailers Cue, Dion Lee, and Veronika Maine have also signed up with Royalpay and will be offering in-store payments using Alipay and WeChat Pay. While this is certainly a step forward, a broader strategy will be needed to create greater brand awareness and lure Chinese customers into stores.   

Social Media and E-commerce

Aussie supermodel Miranda Kerr is not the first Australian to enter the Chinese e-commerce market, but she is certainly making a huge splash since launching on Tmall late last year. Miranda’s brand, Kora Organics, has a full marketing and e-commerce strategy, including a WeChat account, a WeChat store, and live videos shared on Tmall that have attracted over 200,000 views.  

These are just a handful of examples of how Australian retailers are changing their marketing strategies to reach Chinese consumers. With Sydney alone home to more than half a million permanent Chinese speaking residents, and another 700,000 Chinese visitors arriving last year, it is more important than ever to include a China strategy as part of Australian brands’ consumer marketing plans.

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