China’s tourists ready for takeoff, says Blackmores chief
Blackmores chief executive Alastair Symington has called on Australian airlines to resume flights to China to attract more tourists to Australia.
Blackmores chief executive Alastair Symington has called on Australian airlines to resume flights to China to attract more tourists to Australia.
In an interview with The Australian, he said the lack of flights between Australia and China was pushing up the cost of airfares to several times pre-pandemic levels and discouraging Chinese tourists from coming to Australia.
“We need to see more flights between China and Australia to make Australia a more affordable location for Chinese to travel to,” Mr Symington said, speaking ahead of his first visit to China in more than three years.
He said Chinese consumers were more interested in their health and outdoor activities in the wake of the pandemic. But while China had reopened its borders for travel, the limitations on flights between the two countries were encouraging Chinese tourists to look for cheaper travel destinations nearby, Mr Symington said.
“I would like to see Australian airlines resume their flights to China,” he said.
“A bit of competition in the market will make sure we can get a better price for those travellers who want to come to Australia.”
Qantas has yet to resume flights to China.
Blackmores vitamins and supplements, which are currently sold to China through e-commerce channels such as Tmall Global and more recently TikTok, were popular with the million-plus Chinese tourists who came to Australia each year before the Covid-driven travel bans of January 2020.
Blackmores’ latest half-year results show that sales to China rose by 6 per cent to $94m in the last six months of 2022, out of $338m group revenue over the period.
The higher sales there helped cushion a total fall in group sales by 1.6 per cent compared with the last six months of 2021.
Mr Symington said sales to China had been reasonably steady at about 22 per cent of total revenues during the pandemic but he was hoping to see a pick-up in demand from China with the resumption of travel and the ability of the company’s senior Australias executives to re-engage with Chinese staff and customers.
Mr Symington said he used to travel to China every six to eight weeks before the pandemic because of the importance of the Chinese market.
He said the Chinese vitamin and supplement market was the second biggest in the world, after the US, with an estimated revenue of some $42bn, compared to only $3bn in Australia.
Blackmores has just over 50 staff based in China, most of them in Shanghai.
Mr Symington said he would be travelling to China with Blackmores chief operating officer Andrew Fuary, who joined the company in June last year.
“We will be looking at opportunities around (potential packaging of Australian-made products in China) and looking for opportunities for different product categories in the country,” he said.
He said he would be looking at the possibility of selling Blackmores products through physical stores in China, particularly chemists. “We haven’t got a retail footprint in China,” he said. “All our business is sold through e-commerce platforms.”
He said the company was looking at increasing sales to China in the areas of women’s health, eye care and pet vitamins, and potentially selling Blackmore’s products in Chinese pharmacies and packaging its products in China.
His visit will include meetings with executives of TikTok, which has become a popular social media channel for Blackmores to sell its products into China.
Blackmores products were popular with Chinese daigou or personal shoppers in the past, including tourists and Chinese people living in Australia.
But Mr Symington said the daigou market in Australia had become more formal in recent years with the emergence of “corporate daigou” or wholesalers.
At the same time, Blackmores was now pitching sales directly into China through e-commerce channels.
He said the annual 11/11 online shopping festival in China was proving a good outlet for Blackmores products and a good way to test the market for new products.
He said this gave the company a much greater insight into its direct sales than relying on third parties as it had done in the past.
“We now understand exactly where our products are going (in China),” he said.
Blackmores is keen to pitch its new animal product line, PAW, to the China market.
Its pet care product lines were popular in the 11/11 sale last November.
Mr Symington said he was “still very confident” in the Chinese business generally but he hoped to get a better sense of the market during his visit.
He said he planned to resume making regular visits to China this year.
“There’s certainly an opportunity to look at how Chinese consumers have changed and gauge the opportunities for health-related products,” he said.
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