Why Alibaba wants to conquer the Australian market

Generating almost $40 billion in annual revenue in 19 years since it was founded in former CEO Jack Ma's apartment, Alibaba now boasts strong penetration in the Chinese market, with just over 600 million consumers on its online Tmall store alone.

The ecommerce giant, however, has its eyes on global domination, with Australia touted by the company as a country full of intrigue.

To support its growth in Australia and New Zealand, Alibaba Group in February 2017 opened an ANZ headquarters in Melbourne, overseen by Australia and New Zealand managing director Maggie Zhou, who has been with the company since 2000.

Speaking with ZDNet while at Alibaba's 11.11 Global Shopping Festival in Shanghai on Saturday, Zhou said the company's goal is to connect eager buyers in China with the products available around the world, and similarly have a platform for tens of millions of merchants to serve the two billion consumers around the world.

See also: Everything you need to know about Alibaba's 11.11 Singles Day sale

"We see those merchants should be from those countries that have the high-quality products and that are already well sought after by Chinese consumers," Zhou explained. "Australia is really that market, that country ... it has the high quality products, it has the clean, green, natural products, and it is really attractive to Chinese consumers."

Alibaba considers Australia as the origin of high-quality goods -- particularly in the baby and maternity, health and nutrition, cosmetics, and food and beverage categories -- which Zhou said are well sought-after by Chinese consumers.

To Alibaba, the strategy is two-fold: The first part, Zhou said, is to help Australian businesses access the Chinese market, and the other element is the promise of tourism.

"Every year, about 1.2 million visitors visit Australia from China. Every year, there's about 120 million trips from China around the world -- it's a really moving country with high spending," she added. "We deliver tourists to Australia and help the local businesses like the restaurants, tourist attractions ... using technology."

"Australia has big potential not only 1.2 million -- should be more -- we can attract more," Zhou continued.

"Australia is also a mystery for Chinese consumers. Why do kangaroos only live in Australia? Why do koalas only live in Australia? Chinese tourists ... love the country and love the products of the country."

Specifically, Alibaba's Australian roadmap includes the adoption of Alipay by local bricks and mortar stores.

Australia has one of the highest usage rates of contactless payments. Mastercard reports its PayPass "tap-and-go" functionality is used in around 80 percent of face-to-face transactions; it's a similar story where Visa is concerned, with 92 percent of in-person transactions on the Visa network utilising its PayWave service. However, QR codes are mostly used for concert tickets and airline boarding passes.

In a bid to lure Chinese tourists into their bricks and mortar stores, Australian retail pharmacy chain Chemist Warehouse has enabled its point of sale terminals with Alipay.

Zhou said Alibaba has also enabled buskers in Melbourne to use Alipay QR codes for Chinese visitors to tip.

Chemist Warehouse is the largest international merchant on Alibaba's Tmall Global platform. The company was also the third top-selling vendor at Alibaba's 11.11 Global Shopping Festival last year, experiencing sales in excess of RMB100 million -- just under AU$20 million.

During Alibaba's 2017 11.11 Global Shopping Festival, Australia ranked as the third highest selling market.

"We believe the internet can level the playing field by enabling small enterprises to leverage innovation and technology to grow and compete more effectively in the domestic and global economies," Alibaba said. "This includes the millions of SMEs across Australia and New Zealand."

There are nearly 2,000 Australian and over 700 New Zealand brands on Tmall and Tmall Global, many of which entered China for the first time through Alibaba's platforms.

New product categories from Australia include oats and cereal, fresh foods including meat, seafood and horticultural produce, natural skincare products, and active wear. The growth of these products is aided by an online Australia Pavilion which offers Chinese consumers a one-stop shop for Australian products.

Disclosure: Asha Barbaschow travelled to 11.11 in Shanghai as a guest of Alibaba.

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