Customers select vegetables at a supermarket in Fuyang, Anhui province, China, May 9, 2015.
Customers select vegetables at a supermarket in Fuyang, Anhui province, China, May 9, 2015. China's consumer inflation edged up to 1.5 percent in April, less than market expectations and adding to concerns about burgeoning deflationary pressures which are likely to lead to more policy easing Reuters/Stringer

As excitement looms over the Australia-China FTA and the opportunities it will herald for Australian businesses, an expert has advised Aussie businesses to become savvy in their business models for optimising the market opportunities in China’s expanding food market. The FTA with China will make 95 percent of Australian goods tariff-free.

More capital

Patrick Vizzone, regional head of food and agribusiness Asia, along with the National Australia Bank (NAB), called Australian producers to crack the Chinese market and make themselves noticeable in terms of size and resources in trying to attract more foreign capital.

While addressing the Asian Century Conference in Toowoomba, Vizzone reminded producers wanting to export to China about the need to find new capital.

“The key challenge is within creating the supply to meet the future demand, which is the key challenge for Australia going forward. How that's done, we believe, requires capital, and I think Asian investors can help provide that capital in terms of it being patient and long term,” Vizzone noted.

At the same time, he warned against the risk of putting all the eggs in a Chinese basket, as was done by New Zealand with its dairy products. That can turn problematic, when there is a demand crisis, he cautioned.

“Yes China is big, China is large, and you could sell all your product to China, but you need a balanced approach to Asia and you don't want to put all your eggs in one basket,” Vizzone said.

High demand

China is Australia's second largest market for dairy exports and it is expanding. The value of Aussie dairy exports to China was AU$347 million in 2014, noted an ABC report.

At the conference, many Australian producers and exporters shared their observations about the Chinese food market with specific focus on emerging trends and consumer tastes. Exporters like Craig Liu from Anson Pacific urged Australian producers to understand that Asian importers are on the hunt for Australian products that have a clean green image. Liu wanted Aussie producers to match their products with the soaring demand coming from China.

Another aspect that Aussie producers was told to factor in was the uptake in personal technology, including smart phones. Australian producers should leverage the new markets being created with high quality products that Chinese consumers are seeking.

Rick Wan from Treehouse International also noted the surge in mobile e-commerce, with more Chinese people opting to make their purchases through smart phones.

“In terms of ecommerce shopping, the latest figure is actually more like 60 percent of Chinese people making purchases through smart phones,” Wan said, adding that in the near future, Chinese consumers would start ordering meat from Australia to have it on their tables within 24 hours.

Demand is growing in the segment of branded and packaged fruit and vegetable products, transcending the dairy, beef, and grain products, Wan said.

Queensland business

Meanwhile, Queensland's food, wine and skincare producers are already enjoying the high demand from 300 million Chinese online shoppers. According to them, Chinese consumers from Beijing to Guangzhou are buying everything from Australian skincare to baby powder.

Brisbane-based natural skincare brand Simplicite is one company which has experienced high online sales from China, in addition to the huge demand put in by Chinese distributors.

“The purity of our Australian-made products has found a strong market in China,” Simplicite marketing manager Ellen Armstrong said.

“This market has really clicked with the Simplicite difference which is results through fresh plant extracts and nutrient combinations," she said.

Armstrong claimed that sales to all Asian markets are growing by an average 20 percent to 30 percent every year. Same is the case for winemaker Sirromet, who offers online wine sales with prompt home delivery. In 2015, Sirromet clocked in a 40 percent surge in Chinese sales.

The fascination for Australian products continues to be high. Some 39 percent of Chinese online shoppers already acknowledge their purchase of Australian goods from various online market places including JD.com, TMall, Taobao and VIP.com

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