Finance Your Budget Australian shoppers to benefit from Chinese retail giant’s expansion

Australian shoppers to benefit from Chinese retail giant’s expansion

Alibaba Australia
Alibaba's expansion to Australia will save shoppers money. Photo: AAP
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The online marketplace for Australian shoppers has just grown exponentially with the arrival of e-commerce giant Alibaba.

The global Chinese conglomerate has doubled down on the Australian market, officially opening its first Australia-New Zealand headquarters in Melbourne on Saturday.

It is the company’s first expansion in the region, and the venture could reap massive rewards for Australian shoppers.

Alibaba Australia
Alibaba offers savings on a wide variety of products. Photo:

Alibaba, worth $US200.7 billion ($260 billion) according to Forbes, offers more than 360,000,000 products from an unrivalled variety, covering apparel, electronics, food, car parts and more.

It can be compared to online powerhouse eBay, but on a much bigger scale – Alibaba is worth 10 times that of eBay ($US35 billion).

But unlike eBay, Alibaba is primarily a business-to-business portal and operates by connecting buyers to suppliers. The appeal is the price competition with so many suppliers.

Some Australians looking for a bargain have already taken advantage of the competitive pricing for years, however for most it offers a new opportunity to tap into China’s shopping spree days.

On China’s Singles Day – equivalent to our Boxing Day – Alibaba’s main retail site, Tianmao, sold more than $7 million woth of products in the first 90 minutes alone.

The shopping day has even been blamed for shortages of Australian infant formula, which is among the products being discounted.

And according to the group’s billionaire founder, Jack Ma, Alibaba’s Australian venture presents an enormous opportunity for local suppliers with a whopping 260 million registered shoppers.

Mr Ma said Aussie retailers would benefit from China’s economy moving from exporting to importing, and where the middle class is expected to swell to close to 500 million in the next 15 years.

“Domestic consumption will be huge,” he said.

“We need high-quality products and services that China will not be able to supply alone.”

He hoped the e-commerce giant would help Australian and New Zealand businesses “share their world-famous products with billions of customers around the world”.

Forbes estimates Mr Ma’s worth alone at $A37 billion, making him China’s second-richest man.

Australian retailers to suffer

Alibaba Australi
Jack Ma and Alibaba’s move into the Australian markets will hurt local retailers, experts say. Photo: Getty

The move could offer a loophole to the incoming GST rules for online purchases from overseas on July 1, making Alibaba a serious competitor to local franchises.

According to Australian Retailers Association executive director Russell Zimmerman, Australian businesses will suffer as a result of its expansion.

“Local retailers in Australia are doing it tough,” Mr Zimmerman told ABC.

“They are doing it tough because of things like penalty rates. That’s always going to be an issue, whilst we’re paying those penalty rates and whilst retailers have got to compete with overseas retailers sending product in directly.”

So far there are more than 1300 Australian brands and 400 New Zealand brands on Alibaba platforms, many of which entered China for the first time through its businesses.

Alibaba has already formed partnerships with Woolworths, and in May 2014 signed a deal with Australia Post to connect Australian consumers with Chinese manufacturers while at the same time boosting Chinese consumption of Australian products.

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