Celebrated Australian entrepreneur Jessica Wilson is spending a large amount of her time in Shanghai these days, and is even considering winding down the Western-facing side of her Stashd fashion platform to focus entirely on China.
It’s hard to argue with the rationale. Stashd’ growth in China is outstripping its Western business by an eye-popping margin. And since Ms Wilson participated in the Shark Tank-style reality TV show The Next Unicorn in China last year, the company has attracted Chinese capital interests – including from internet giant Tencent.
Ms Wilson has been travelling to Shanghai about once a month from her Sydney base. This is a new breed of Australian entrepreneur, very much focused on Asia markets to the north – and in the case of Stashd, specifically on China.
Ms Wilson said Stashd would maintain and team in Sydney, a team in Shanghai and is currently building a team of buyers in New York.
The Stashd fashion app remains entirely focused on the millennials market, but it is now laser-targeted on connecting Chinese millennials to western brands. That’s a massive, growing and sophisticated market.
Like most entrepreneurs, Ms Wilson is a glass-half-full personality type. But even if there were moments of private self-doubt, she reminds herself of a “China 2030 rule” that has stuck with her since she heard it at a Shanghai celebration of the CHAFTA.
“That is by 2030, there will be 850 million middle class [consumers] in China,” she said. That’s a big number.
“There is a whole economic shift going on at the moment. I find that as western companies, we have a massive opportunity to look at China more seriously and to start to align with China businesses,” Ms Wilson told InnovationAus.com’s China Money, China Markets forum in Sydney.
It’s possible the Stashd founder had a bit more spring in her step than usual last week on the back of news that Chinese eCommerce giant JD.com had paid US$397 million for a minority stake in FarFetch – a similar millennials fashion app but focused at the luxury end of the market.
The FarFetch-JD.com investment is a significant validation for Stashd and its own go-to-market.
Another stand-out Australian entrepreneur with a focus on China is Andrea Myles, the founder and CEO of the ambitious China Australia Millennial Project. She says Australians have a blind-spot in relation to digital opportunities in China that is difficult to understand.
The question of whether Australia should be focusing more on opportunities in China is “as obvious as asking whether Australia should turn on the internet,” Ms Myles said. “Yes.”
“Will we have to do things differently? Of course we will. Is it going to be difficult? Yes.
“But get over it. Let’s just get on with it.”
Former Austrade international operations group executive director Grame Barty says China must be treated differently to other global markets right now, because it has characteristics like no other market and “has forces applying to it and driving it forward like no-other.”
This is especially true of fintech and ecommerce sectors in China, where the Harvard Business Review has referred to “a parallel digital economy” and Mr Barty himself describes slightly more ominously as an “economic tsunami”.
The point, is that opportunities exist but that the market needs a calculated focus like no other in relation to tech and tech-enabled companies.
He describes the opportunities for Australia that match Chinese trends and drivers could be:
- Technology, products or capability that support China’s requirement for energy, water and food security.
- Products and services associated with health and well-being and build on Australia’s reputation for policy, governance and regulation – especially food products, food safety, complementarity medicines and aged care services.
- Financial and banking services – especially ecommerce, digital currency and distributed secure ledger technology and the cash economy but also in wealth management – capturing the large part of the population described as the ‘unbanked’.
- Environmental services or technologies relating to air pollution, urban water, river systems or soil degradation management.
- Infrastructure and project management services and technology in design, building, construction, ports and rail.
- Products associated with increasing discretionary ‘aspirational’ consumerism – such as wine and beauty products, sports technology or fashion.
- Education and training – K to 12, higher education, vocational training and corporate training especially in the fast growing aged care and aviation sectors.
The great advantage for Australian innovators is most of Mr Barty describes is clearly outlined in the 13th Chinese Plan priorities. You can read the full presentation here.