More Chinese online shopping apps enter Australia, helping to tame inflation

Straits Times

23-05-2025

Alibaba's Taobao and JD.com have joined Temu and Shein in the Australian market. PHOTO: REUTERS
SYDNEY - As businesses globally fret about sky-high US tariffs reviving rampant inflation, in Australia, the redirection of cheap Chinese goods is expected to provide relief for consumers and policymakers worried about stubborn cost pressures.
Alibaba's Taobao and JD.com are the latest Chinese e-commerce platforms to enter the Australian market, seeking to tap into the bargain-starved country's appetite for online deals.
The expected flood of cheap goods from China, on top of a recent slowdown in inflation, is among several reasons the central bank felt confident enough to cut interest rates this week.
In an economy like Australia's that manufactures very few finished products domestically, Taobao is finding new markets outside of its core Chinese-speaking consumer base.
'I don't shop a lot, but if I do buy something, I will buy it online... If I can get it cheaper through Taobao, 100 per cent I'll buy from them,' said Jodi Clarke, a therapist in Melbourne, whose first purchase on the site included three look-alike Hermes Kelly bags for A$129 (S$107).
China's factories are rushing to reach more new markets overseas as the domestic economy slows, with US President Donald Trump's sweeping tariffs making it much more difficult to access the United States, the world's largest consumer market.
Frederic Neumann, chief Asian economist and co-head of global research at HSBC, said the expansion of Chinese e-commerce platforms overseas will intensify disinflation pressures, especially for consumer goods.
'What the world is facing is a growing inflation divergence between the US and other economies, with prices climbing in the former, and stabilising, if not outright declining, in the latter,' said Mr Neumann.
While the flood of Chinese goods has raised alarms in manufacturing-dependent countries in South-east Asia, Australia's overwhelming reliance on imports for many household items diminishes most such concerns.
'Because Australia has a higher share of Chinese products in most parts of its import basket compared with other economies, the redirection of tariff-affected exports is likely to place additional downward pressure on Australian import prices, especially in the short term,' the Reserve Bank of Australia (RBA) said in its quarterly economic update this week.
Australia bought a whopping A$110 billion of goods last year from China, easily its biggest trading partner. Chinese trade data for April showed exports to Australia jumped 9 per cent from the previous month while shipments to the US tumbled almost 18 per cent.
The RBA also noted cheap goods from China are unlikely to displace much Australian production and could even benefit industries reliant on imported inputs, such as clothing retailers.
Goldman Sachs has estimated the redirection of Chinese goods into Australia, particularly in toys, furniture and clothing, could subtract 20-50 basis points from headline inflation over the next year or two. Those forecasts were made before China and the US agreed to pause steep tariffs this month.
Headline consumer price inflation held at 2.4 per cent in the first quarter, comfortably within the RBA's target band of 2 per cent to 3 per cent and having come down from the 7.8 per cent peak in late 2022.
Chinese e-commerce platforms are not completely new in Australia, with Temu already capturing big chunks of online sales, but their broadening appeal to Australians comes as they wrestle with lingering cost-of-living pressures.
Singapore-based online fast-fashion retailer Shein, which sells clothes made in China, earlier in May held a pop-up store in Sydney and launched its first Australia-focused brand, Aralina.
Alibaba had been a low-key cross-border player until last year when it started investing aggressively to boost global sales, including in Australia. Its main competitor JD.com also launched its Australian site in March.
The push was initially designed to reach more Chinese buyers overseas, but Mr Trump's tariff chaos thrust those e-commerce sites into the spotlight, with Taobao now offering an English version of the app.
Taobao is already promoting sales in English for the annual '618' shopping festival on June 18, one of China's largest. It offers free shipping to Australia for clothes worth more than 249 yuan (S$44.60). REUTERS
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