Cruise control: Australian daigou specialist targets Chinese tourists via experiential retail

The experiential retail store is dedicated to selling smaller Australian brands, ranging from dietary supplements to food and cosmetics.

Some examples include supplement brand “iThrive” and even bottled Australian air.

To help consumers understand the products, the store offers experiential services, based on the “Touch, Learn & Order” (TLO) concept.

Consumers can have a first-hand taste of the products, learn health and wellness practices, and the differences between different products in the store.

They can then either purchase the product instore or online using an instore WeChat offline-to-online (O2O) device. The latter allows consumers to ship the products home.

Speaking to NutraIngredients-Asia,​ founder and CEO of Reach China, Dr Mathew McDougall said that the model was meant to disrupt traditional retail. The firm had spent the past five years focusing on daigou sales.

“Chinese travellers are increasingly coming to Australia as independent travellers and are seeking uniquely Australian experiences. ​

“They are also Australia’s most profitable traveller, outspending any other nationality coming to our shores.  ​

“We want to disrupt traditional retail…We want to introduce new things, to let consumers discover, feel, touch, and learn.​

“That sort of experiential learning is the way we think brands will cut through audience that don't traditionally understand that brand or were even aware of that brand,” ​McDougall said.

He plans to roll out more TLO stores across key tourist spots in Australia next year.

The goal is to reach out to about 25% of the two million Chinese cruise travellers in Australia.

Brands benefits​

The tourists can choose to buy the products from the TLO store directly or order for home delivery. Such arrangement gives brands and retailers the export capability they presently lack.

The mode of payment is also catered for Chinese tourists’ use, where WeChat payment is available, and information is available in Mandarin. 

Dr McDougall said that the firm has been talking to a number of retail chains to put in place such arrangement.

“We bring export-ready capability to retail partners. The retail shop owners can franchise this cross-border experience into their shops.” ​

Using the firm’s BuyNatural WeChat program, the consumers can continue to gain access and purchase from the TLO stores when they return back to China.

China debut​

The firm also plans to launch a network of TLO stores in China next year to target local Chinese consumers.

Products purchased will be delivered to the consumers from the free trade zone warehouse in Shanghai.

With this, health foods brands can enjoy physical retail presence in China without going through time-consuming regulations such as the Blue Hat registration.

“The challenge for a lot of new brands in China is that, if you can't get the product registered, then you can't put them on shelves in China. ​

“This (TLO stores) allows us to bring new brands into China without going through complicated regulatory hurdles.” ​

Making the cut​

Each week, Reach China receives queries from about five to 10 Australian brands, ranging from dietary supplements, food, to cosmetics, for partnership on promoting their products into China.

On average, only 25% are accepted, about 50% do not make the cut, and the remaining 25% will need to repackage or re-price their products to suit the China market.

The suitability of the products is assessed by the firm’s product council formed by a panel of Chinese consumers.

The assessment criteria include pricing, taste profile, market needs.

At present, there is a greater interest in natural and organic products amongst the Chinese consumers, said McDougall.