(By David Landers - General Manager, East Asia Growth Markets for Austrade)

There have been regular questions over whether China can make a smooth transition from an infrastructure spend driven economy to consumer led one.

However, to be reassured at the role consumption will play in China’s economy one needs only to look at mobile devices.

The emergence of China’s online shopping industry is nothing short of a revolution.

Traditional patterns of commerce are giving way to awhole new model of consumption.

More than 300 million Chinese shoppers spent around $A500 billion dollars online last year, a 50 per cent increase on the previous 12 months alone.

Those numbers are staggering but the factors driving them are even more important for Australian business to understand.

We are witnessing a transformation with uniquely Chinese characteristics, marked by the proliferation of mobile, internet-connected devices (more than 650 million at last count) and a deep convergence of e-commerce and social media.

E-commerce in China is not simply a transaction, it is a conversation. One might even say it is a way of life.

Purchasing decisions have become a form of personal expression, part of a wider discourse around questions of status, fashion, integrity and trust.

The industry is also transforming transport and logistics.

The giants of China’s e-commerce industry are either building their own sophisticated logistics platforms or creating intense pressure on others to do so.

These are equal to or better than the best in the world.

A couple of decades ago, that would not have been possible because the supporting roads, high speed rail, ports and airports had not yet been built.

I know this from first-hand experience.

In the early 1990s, my own company built one of the first fully integrated cold-chain systems to support the early roll out of KFC restaurants in Shanghai and surrounds. It was challenging.

Another precondition to the current phenomenon is pricing. There was a time when price really mattered in China. This is rapidly changing as middle class discretionary spending skyrockets.

Today, the ‘new China consumer’ is looking for quality as well as value.

That plays straight to Australia’s strengths in China, where robust research undertaken by Austrade confirms we are grouped among an elite few countries perceived as providing premium consumer products.

E-Commerce provides Australian companies with a channel to access affluent and discerning consumers, in particular those in China’s second and third-tier cities beyond the major coastal regions and centres like Beijing and Shanghai.

These cities are large markets in their own right and growing much faster than more mature markets of Beijing, Shanghai and Guangzhou.

China is already our No.1 export market, our largest source of international students, our most valuable tourism market, a major source of foreign direct investment and our largest agricultural goods market.

We now also have the China-Australia Free Trade Agreement, or ChAFTA, which will improve our competitive position and open the door for Australian companies to become even more deeply involved in the market.

ChAFTA, however, does not re-write the rules for doing business in China: quality relationships, good market intelligence, ease of doing business issues and considerations such as foreign exchange still matter.

Austrade has just released its, ‘E-Commerce in China: a Guide for Australian Business’.

The guide is highly practical and comprehensive,covering every facet of taking your business online in China.

It is available to Australian businesses online through the Austrade website.

The guide was recently launched in conjunction with a series of seminars held in Melbourne, Sydney and the Gold Coast.

The response was exceptional, with more than 600 Australian companies attending.

Representatives from China’s most influential online platforms including Alibaba, JD.com, Yihaodian and VIP.com were key speakers at the seminars.

For the first time, major companies accounting for more than 82 per cent of online business-to-consumer sales in China shared a stage to answer questions from Australian business.

Our China e-commerce outreach program will work with our national Trade Start network, state trade & investment colleagues and industry partners to deliver more seminars, webinars and other information sessions across Australia including regional centres in the months ahead.

Australian businesses with appropriate products must act now to ensure they make the most of the online market places ands ophisticated distribution systems.

The benefit to Australian international businesses from ChAFTA is clear, but China’s continuous revolution in e-commerce is also a factor that will shape our future commercial prospects in one of our most important trading partners.