Here’s how Aussie SMEs are still finding success in China, despite ongoing challenges

Australian small and medium-sized businesses need to be as Asia-capable as big businesses in order to thrive in the challenging Chinese economy, the country’s peak industry body the National Centre for Asia Capability has cautioned.

According to Asialink Business’s report Risk and Reward: Opportunities for Australian SMEs in China, released yesterday, Australian small and medium-sized businesses no longer rely on traditional approaches to doing business.

Instead, the report has found that Australian SMEs that are adopting innovative approaches are still achieving success, identifying 11 key Australian businesses in China, across the food, fashion, health, and skin care sectors.

Despite political tensions, increased tariffs, rising freight costs, and travel restrictions presenting ongoing challenges, these sectors are seeing an upward growth trajectory.

Australian business Aromababy Natural Skincare has been exporting to China, Hong Kong, Singapore, Dubai and South Korea for 15 years and is one of the businesses still finding success in the region.

Founder Catherine Cervasio says her business would not have survived the domestic market had she not expanded overseas.

“In my experience on the ground in China, if you are not in stores then you are not serious about China. People will go to the store and have it shipped to their house. They go in because they want to touch it, feel it, trust it, and know that it’s an authentic Australian or foreign product,” she said.

Cervasio advised other small businesses that were thinking of expanding overseas to start small.

“Do your research first where you’re planning export first, secure intellectual property so the business can trade the same way it’s trading in Australia. Starting off small, perhaps starting with Hong Kong or Singapore and then expanding to China will help,” she said.

“(Our expansion overseas) started by somebody approaching us looking for very premium and innovative products, at that time we were the only producers of natural baby care.”

Other Australian businesses that have found success in the Chinese markets are Australian cherry producer Reid Fruits which has been exporting to China since 2008 and Meluka Australia, a food and beverage company that makes tea tree and honey-based products and has been in the China market since 2020.

Asialink Business CEO Leigh Howard says Australian SMEs are still achieving strong outcomes from China, based on prevailing consumer demand.

“Consumers recognise quality when they see it. Savvy Australian companies leveraging this demand have adapted their strategies and operating models to find success,” Howard said.

“While Aussie SMEs don’t have the resources of big business when operating overseas, with innovative approaches many are achieving sustained growth.

“While it’s true big international brands are popular in China, interest in smaller overseas brands with unique offerings has taken off, with small and medium-sized producers of distinctive products leveraging the high regard international consumers have for Australia as a producer of safe, clean, and high-quality products.

“This report shines a light on the innovative approaches these Australian businesses are using to succeed in the region.”

Howard says to remain competitive in China, Australian businesses will need to keep pace with rapid changes in consumer preferences and expectations for speed, variety, and service when shopping.

Australian SMEs finding success in China

1. Aromababy is a natural and organic baby and maternal skincare company that has been exporting to China since 2007.
2. Cizzy Bridal is a Perth-based bridal gown company with six unique labels. It has been exporting to China since 2016.
3. Ego Pharmaceuticals is an Australian-owned skincare company exporting to Asia since the 1970s and to China since 2017.
4. G&M Cosmetics is an organic skincare company that has been exporting to China since 1998.
5. Meluka Australia is a food and beverage company that makes tea tree and honey-based products. It received its first shipment order from a leading Chinese distributor in mid-2020.
6. Ozlana is an Australian fashion company that set up a pop-up store in Beijing in 2021 and has remained in the market.
7. Pipan Foods is a baby and child nutrition products company that started exporting to China in 2018.
8. Reid Fruits is one of Australia’s largest cherry producers, exporting to over 20 countries globally. It has been exporting to China since 2008.
9. Remedy Drinks is a beverage company, that exports its kombucha to 12 markets globally. It expanded into China in 2020.
10. Tamborine Mountain Distillery is an award-winning boutique liqueur and spirits manufacturer that has been exporting to China since 2019.
11. Vita Life Sciences is a pharmaceuticals and healthcare company. Its Herbs of Gold and VitaHealth brands are sold in China.