E-commerce offers opportunities for Australian food industry

22nd April 2015

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The reputation of locally produced food in the Chinese market is not great. This is why Chinese mothers have a huge desire for importing baby food to ensure they are feeding their babies the highest quality products.

Food safety standards are much higher in Europe and Australia, and Chinese consumers will pay a premium for these products.

Many mothers in China are importing food directly from overseas markets via the internet. This has lead to a boom in e-commerce opportunities for countries such as Australia, which are well-known producers of food stuffs and have a high reputation for food quality and safety.

According to strategic market research Euromonitor, a recent baby milk formula safety scandal in New Zealand shows that Chinese consumers are paying attention to quality issues in the markets they import from. The internet allows customers to very easily change what country they choose to buy food from with a simple click of a mouse.

Lianne van den Bos, a food analyst at Euromonitor, has said that "even a scare can cause significant damage to infant formula brands given the sensitive nature of Chinese consumers in this particular matter".

This offers both an opportunity and a risk to Australian food producers and to any e-commerce business that relies on exports. The opportunity to take advantage of food safety concerns of other countries means Australian exporters can easily market themselves as a safer alternative for Chinese consumers.

However, if the same companies stake their claim to having high standards of safety, they must make sure they do have the substantive quality control systems in place to avoid a contamination scare.

Major multinational food exporters such as Nestlé, Mead Johnson and Danone are all investing heavily in e-commerce. However, the internet means smaller exporter can still compete with the so-called big boys.

E-commerce means that even the smallest business can succeed if they not only have expert-level systems in place to manage their products, but also an accounting system to make sure the financial side is taken care of.