Nestle links with Kaola.com to sell snacks into China

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Sue Mitchell 
June 3 2018
AFR

Infant formula and vitamins are not the only Australian-made products in high demand from middle-class consumers in China.

Australian brands including Uncle Tobys muesli bars, Soothers throat lozenges and Allens lollies are heading to China under a deal between Nestle Oceania and Chinese cross border e-commerce site Kaola.com, a subsidiary of listed technology company Netease.

“These are iconic brands that have been around for 125 years in Australia and they’ve got a benchmark of quality in the Australian market,’ said Nestle Oceania’s general manager of confectionery and and snacks, Martin Brown. 

“It’s an exciting opportunity to bring the best of what we make in Australia to a large and important market of food lovers who are interested in and value the quality of Australian made,” he said. 

Nestle already sells its market leading chocolate confectionery brands such as KitKats and Smarties in China through joint venture partners.

Mr Brown said Chinese consumers wanted to buy Australian brands from trusted destinations and selling them on sites such as Kaola.com, which accounts for 25 per cent of the Chinese cross border e-commerce market, gave them more authenticity than if they were on Chinese supermarket shelves.

Australian food and beverage imports into China are growing about 40 per cent a year and now account for about $5.3 billion of the $130 billion in food and beverages China imports globally. 

The major food and beverage exports from Australia to China include milk powders, yoghurt, cheese, seafood, fresh fruit, breakfast cereals, baby food and wine.

Bringing Australian living to Chinese consumers

However, Theresa Feng, vice president international business at Netease/Kaola.com, said Chinese consumers were increasingly keen to experience other Australian lifestyle products.

“What we want to do is bring the Australian lifestyle to China and let them use and try what Australian people are using … not only the popular products but the daily food and beverage and daily home applications,” Ms Feng said.

“We want to  create a whole concept of Australian living for Chinese consumers.”

Ms Feng said Kaola.com, which was launched in 2015, had about 800 million users and its customers were generally wealthier and better educated that shoppers on e-commerce sites such as Alibaba and JD.com. 

Women account for about 80 per cent of its customer base and the typical customer is women aged 25 to 35 years who buy for themselves, their children and their parents, shopping on average 1.5 times a month. 

Kaola.com carries about 5000 brands from 80 countries, including more than 300 Australian brands such as Bellamy’s, A2 Milk, Blackmores, Swisse and Morning Fresh.

Woolworths also has a store on the Kaola.com site and sells Woolworths, Select and Macro-branded goods such as muesli, breakfast biscuits, ground coffee, passata, honey, dried fruit and nuts.

Australian food and  beverage exports to China are expected to soar next year when the China-Australia Free Trade Agreement comes into effect.

Mr Brown said Nestle Oceania was working with several e-commerce partners to boost food sales to China.

“We value partners with good knowledge of the consumers they’re targeting,” he said.

“Kaola.com has a very clear profile that matches up well with consumers interested in high quality products – they’re a natural partner to work with.”