Alibaba joins a growing list of leading international digital technology companies that have chosen to locate their regional operations in Melbourne, including ZendeskSlackSquare,  and Cognizant.

The online giant’s choice of the Victorian capital for its regional base promises a huge boost for the state’s small businesses hoping to access China’s A$1 trillion a year online retail market.

Alibaba’s websites have hundreds of millions of active Chinese users and handle more business than eBay and Amazon combined.

Sales by merchants using Alibaba’s websites total over A$650 billion a year. The company’s Singles Day promotion, held on November 11 last year, generated over A$23 billion worth of transactions in just 24 hours.

Alibaba operates several online sales portals. Australian shoppers may be most familiar with Aliexpress, an English-language eBay rival. However within China, it is Alibaba’s Tmall Global that predominates. Tmall is the country’s most visited retail website and offers overseas companies cheap and easy access to the massive Chinese market.

Growing opportunities

In March 2016, the State Government of Victoria established the first-of-a-kind partnership with Australia Post and Tmall to provide Victorian businesses easier access to the Chinese market through the Tmallplatform.

Australia is now one of the five most active countries on Tmall. Australian health and nutrition products are especially popular, with companies such as Chemist WarehouseSwisseBlackmores and Nature’s Way topping the sales charts.

Alibaba group executive chairman Jack Ma, who visited Melbourne to coincide with the opening of the company’s local headquarters, said this would only continue to grow.

“The opening of the office in Melbourne will mean more opportunities for Australian exporters,” he said.

Victorian success story

Victorian companies already capitalising on Tmall include Melbourne’s Goat Soap Australia, which sells its unique range of skincare products into China via Chemist Warehouse’s Tmall site. The company clocked up an astonishing A$1 million worth of sales via Tmall on last year’s Single’s Day alone.

Melbourne pharmacist Danielle Di Pilla started the company five years ago and has seen sales rocket since she joined Alibaba.

“It’s been a really good initiative for Trade Victoria to get Alibaba to come to Melbourne, it’s really opened a lot of opportunities for companies like ours,’’ said Di Pilla.

“eCommerce platforms like Tmall allow small family businesses to trade freely online in China for relatively small setup costs and also allow us to bypass some of the complex regulatory systems in China.

“They effectively allow the world to come to your doorstep without you leaving your front door.’’

The Goat Skincare was the biggest-selling Australian product range on Single’s Day for the second year in a row.

“Singles Day has grown and grown, and now it is now the biggest sales event in the world,’’ said Di Pilla.

“In 2015 on Singles Day, we sold 175,000 units on the Chemist Warehouse Tmall Global site. We thought this was going to be really hard to beat last year, but we sold over 350,000 units, or about $A1 million.’’

Clean and green

Di Pilla says Victoria is the perfect base from which to serve the Chinese consumer.

“Melbourne’s a great place to do business, particularly because we’re so close to the Asia Pacific, so the locality is great for us,’’ says Di Pilla.

She sources the ethically produced goats’ milk used in her range from pristine Gippsland farms, and all her products are guaranteed chemical-free.

“Because of the clean and green living standards we have in Victoria, our products are very sought after in the China market,’’ she says.

The Goat Skincare has grown from a small home business and now employs over 150 people.

The biggest problem we’ve had is keeping up with demand for our products,’’ says Di Pilla.

“It’s a good problem to have.’’