Rural Funds Management: e-commerce sales in China to boom, opportunities for Australian beef

China’s e-commerce boom offers opportunities for Australian food exports. See which product is most in demand.

E-commerce sales channels offer opportunities for Australian beef. Picture: Andy Rogers

Sales of Australian food products into China through e-commerce channels may boom in coming years, but only if the trade dispute between the respective governments can be resolved.

That’s the view of Rural Funds Management managing director David Bryant, who said sales of food through e-commerce channels into China was estimated to rise at an annual compound growth rate of 30 per cent through to 2025.

Mr Bryant said e-commerce channels in China were probably now more important than supermarket sales for many food products, particularly beef.

“There is evidence of significant e-commerce consumption opportunities for food products in China,” he said

Mr Bryant said African Swine Fever outbreak in Chinese pigs and the subsequent Covid-19 pandemic had provided opportunities for beef.

Pork was by far the most popular meat consumed by volume in China, followed by chicken, then beef.

He said the African Swine Fever outbreak caused a shortage of pork in late 2019, prompting prices of the meat to skyrocket.

“Consequently, demand for beef increased, with corresponding price increases,” he said.

“By the beginning of 2021, pork production recovered and prices dropped to prior levels but beef prices have remained high.

Mr Bryant said prior to Covid-19, about 70 per cent of beef was consumed outside the home in hot pot restaurants.

But during the pandemic, more beef was eaten at home.

He said the easing of lockdown restrictions had meant there were more opportunities for beef sales direct to consumers possibly due to their “new-found mastery of beef consumption at home”.

Mr Bryant said beef consumption in China by value had now overtaken chicken.

“It’s the second most valuable meat commodity,” he said.

“That’s quite phenomenal.”

Mr Bryant said Australia beef exporters could capitalise on the trend but the trade impasse between the two countries needed to be fixed.

“Every sensible thing should be cone to resolve those issues,” he said.

Australian Meat Industry Council chief executive and Red Meat China Taskforce chairman Pat Hutchinson did not disagree with Mr Bryant but said e-commerce channels were part of the solution of regaining beef sales into China, not the panacea.

“We need volume going into that market,” Mr Hutchinson said.

“Or we need to look at new and innovative ways to putting product into China.

“That doesn’t equate to volume but equates to extracting value.”