ECargo launches local growth platform, targets regional China
After completing the acquisition of both Metcash’s Asia business and Jessica’s Suitcase, e-commerce business eCargo is expanding its reach in Australia with a local growth program.
The program aims to assist food and beverage brands who are looking to enter the China market by educating them on the unique characteristics of the market.
“We’re launching [this program] in Australia to provide a quick, efficient and cost-effective way of entering the Chinese market for small and boutique brands who otherwise don’t have the resources, capability or funds,” eCargo chief executive officer Will Zhao told Inside FMCG.
“Our vision is to develop the brands and make them scalable, as well as entering into distribution deals which will add significant upside to revenue.
“For Australian brands it will mean more sales and tapping into a massive market which is otherwise foreign to them. For Chinese consumers it means tasting and trialing new and interesting products which they otherwise wouldn’t have access to.”
According to Zhao, the last 12 months have seen increasing demand for imported fashion, cosmetics, personal care, and health food from Chinese consumers.
“The Chinese marketplace continues to change rapidly and ways to promote and market Australian brands are becoming more sophisticated,” Zhao said.
ECargo is but one of a number of players bringing international brands to China – enough that earlier this year the Chinese government year revised regulations to provide more oversight to cross-border operations.
According to Zhao, this change only serves to help players such as eCargo, which have “played by the rules from the beginning.”
“Official channels like us will benefit as diagous drop out and traffic is driven to our channels as a result,” Zhao said.
Looking forward, eCargo is expanding its operations in China beyond its urbanised areas and into more regional locations, having extended commercial supply lines into cities including Kunming, Changzi and Longkou.
“Our strategy on expanding into regional China has been a core offline focus for us,” eCargo non-executive director and founder of Jessica’s Suitcase Jessica Rudd told Inside FMCG.
“There are a number of natural barriers to entry in these markets – such as language, logistics, cultural understanding and ways of doing business – but the amount of work we have done over the last three years in developing these markets means we are well-positioned to reap the benefits.
“Demand in these markets continues to grow and given there is limited supply, we are seeing a positive contribution to our business, which we expect will increase in years to come as the markets become more mature.”