The insatiable hunger of Chinese tourists for baby formula from Australia and New Zealand is a signal for an emerging business opportunity for many pharmacy owners. But the scope for growth is far greater.
Every retailer of baby formula must be aware of the current frenzy around Chinese tourists and residents and their strong demand for baby formula. Pictures of Asian customers pushing supermarket trollies filled with milk powder hit the evening news and social media in recent weeks. However, it wasn’t long until local mothers took to the web expressing anger and frustration about the perceived shortage of baby milk powder in Australia. Many retailers found themselves stuck between a rock and a hard place when trying to ensure a fair distribution.
The reasons behind the rush
Most commentators agree that there are two factors responsible for the rising Chinese demand for Australian health products and both find their origin in mainland China. The first is connected to the economic rise of large parts of the 1.3 billion Chinese people following years of double digit growth. The second factor relates to an increased desire for a healthier lifestyle and a shift in attitude towards health-risk awareness.
2008 Chinese milk scandal
And health consciousness is the main reason for the current run on Australian milk powder. To date, the Chinese food industry has been plagued by scandals of the worst kind. In 2008, an estimated 300,000 infants fell ill after consuming a local infant formula that was deliberately adulterated with melamine, a harmful and toxic chemical substance. The government was forced to act and as a result, two people responsible were sentenced to death and others given life sentences. But this did not increase the quality of local food products, in the eyes of many Chinese.
Chinese want clean, green and safe
Due in part to these scandals, food products from Australia and New Zealand are highly regarded by Chinese consumers. Many Chinese believe the strong administrative oversights and effective controls on both sides of the Tasman ensure the high quality of local products. And this goes far beyond milk powder. Pharmacy products like vitamins, food supplements, protein products, cosmetics and krill oil rate high on the shopping list of Chinese travellers.
Local pharmacy entrepreneur leads the way
Melbourne-based Chinese-Australian entrepreneur Tony Lu, realised the potential of this market three years ago. Chinese customers would frequently ask for food supplements and other products associated with a healthy lifestyle when visiting his gift shops. Creating his own range of Australian made products tailored to the needs of Chinese customers, Mr Lu’s healthcare shop, at the gates of Chinatown, now turns over more than $1 million dollars in sales per year.
As the final chapters on China’s one-child-policy close and tourism from China steadily grows, plenty of opportunities for Australian pharmacies are set to emerge. Here are a few simple changes you can implement today to take advantage of this emerging market.
- Promote home grown products
In terms of products, the most important attribute for Chinese customers is the country of origin. Chinese people associate Australian and New Zealand as producers of high quality and safe health products. Browse the offerings of local natural health care and food supplement producers to find the right products for this target group. Don’t forget; even over-the-counter products like paracetamol products are in high demand too – when produced in Australia.
- Generate word of mouth
Take your cue from the Pharmacie de Monge in Paris and employ multi-lingual staff who are able to provide a friendly welcome to Asian customers, leaving them with an experience to remember. After landing a few favourable reviews in a number of popular Asian travel guides, the small pharmacy in the Latin Quarter of Paris has become a tourist attraction in itself. A third of its daily customers now come from Asia.
- Customer service
Now, that’s an easy one. A Chinese shopper is in no way different to other shoppers – if you forget about the language barrier. Being friendly, respectful and well-informed will resonate with Chinese shoppers as well as with customers from Darwin. Word of mouth is a strong marketing tool and if you go out of your way to get that Chinese shopper exactly what she wants, chances are good that the rest of her travel group will hear about it and follow her recommendation.
- Language barriers
While non-verbal communication is often universally understood, there are useful smartphone apps to help express your message in a foreign language. There are solutions for iPhone and Android users that can even produce sounds and give pronunciation advice. The language universally understood in China is Mandarin, while Cantonese is a dialect that is dominant in Guangdong, Guangxi and is the ‘official’ spoken language of Hong Kong and Macao Hong Kong.
- Accepting UPI cards:
Accepting UPI cards is an easy way of reaching out to the Asian consumers as they are the preferred means of payment for Chinese shoppers. A business with a UPI label on its shopfront can expect a 20-fold increased likelihood of attracting Asian customers*. Learn more about UPI here.*