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Ali Express – Impacting Australian Small Business

Recently I got in touch with Brooke Staff, a very passionate mother whose daughter, Zeta (Instagram @misszetarose) is a brand representative to a number of handmaiden businesses including Nurture the Nest. Brooke has experienced firsthand the impact globalisation has had on the Australian small business marketplace through the entrance of companies such as Ali Express. Brooke has written her experiences below, and it makes for some very eye-opening reading, particularly for owners of Australian small businesses whose products could be easily replicated or copied on a mass scale.

Ali Express – Fast track to the demise of small handmade business in Australia?

Written by Brooke Staff.

There’s an old saying that when you buy from small business, that an actual person does a happy dance. And they’re not wrong! When you buy from small and local businesses, there are real people and real faces who are usually reinvesting all their profit back into their business, just to keep it afloat, and to provide that personalised customer experience so that they can keep consumers returning. Small business is often less about making a profit, than it is about making people happy.

We have been brand representatives, ambassadors, enthusiasts – whatever you’d like to call us – for close to 4 years. We sort of fell into it after supporting local, handmade businesses and sharing photos on Instagram. After a little while, our photography improved, our content improved – and here we are now, quite successful at what we do.

Most of what we do and who we support, are Australian handmade businesses. Many of whom, I’ve seen over the last 12 months in particular, close down – for varying reasons. Many of whom are still around, but are becoming increasingly heartbroken and doubtful of their business’ future.

One of the most prominent reason for their business uncertainty, however, is the overwhelming growth of the Chinese marketplace, Ali Express. But how?

What is Ali Express?

Ali Express is a retail market arm of Alibaba.

Chinese product suppliers advertise their products on Ali Express (sort of like eBay – some of them share advertising across both platforms). Some might view it as an access point to facilitate small business in selling to consumers. I guess it started as a platform to facilitate for Chinese small business.

But what it has become, is so much more. It has become a market place for other “small businesses” worldwide, to purchase products in the retail market for exceptionally cheap prices, and then on-sell to their own target consumer group with profit margins and mark-ups of up to and sometimes exceeding 200%.

Imitation is not always the greatest form of flattery!

Where it becomes heartbreaking and overwhelming for small Australian business owners, particularly within the handmade community, is where locally designed products – particularly clothing – pop up all over Chinese market places such as Ali Express, but not in their original form.

Rather, they are produced in a form that is a poorly made replica or copy, that has been produced in a sweatshop of employees who are paid about 37 cents per hour (if that). You have to ask yourself – how the hell could a retailer (remember Ali Express is the RETAIL arm of Alibaba – not wholesale) be making any profit on a garment that they are selling for between $3 – $7?

In the Australian handmade market, that minuscule amount of money wouldn’t even cover the cost of materials for a single garment – let alone the actual manufacturing. For the manufacturing of garments (and their materials) to be sold so cheaply, and still somewhere along the way be making a profit, is unethical and valueless.

Irrespective of the ethically made argument, as I stated above, many of these products are copies of original designs. Patterns that have been created and manufactured by hardworking designers.

Fabrics that have been purchased exclusively.

Designs that have had blood, sweat and tears loaded into and tested, tested and tested again to perfect.

The highest quality materials used to make the highest quality products.

And, even where local designers are having their products ethically manufactured offshore – their designs are stolen and copied as well, to be produced unethically.

Then there is the issue of the images being stolen from the said businesses in order to promote their poor quality copies. Many of these images are photos that have been taken by brand representatives and customers who have supported Australian handmade.

Yep, even photos of my daughter Zeta, have been stolen and used to promote unethical Chinese “knock off” products.

Drop Shipping Impacts Too!

Push all of that aside and we move onto the Australian owned businesses who knowingly purchase these products from Ali Express to either “drop ship” or sell in their own online retail market place.

These businesses don’t really care what they do. After all, they purchase a dress off Ali Express for $5. It arrives, they put a $25-30 price tag on it and they’ve made a minimum of $20 per item. That’s a higher profit margin than the likes of Kmart when you think about it.

The original, handmade, locally designed product would usually retail for about $45-50 on average. So the money that you are saving in buying the cheaper, poor quality piece – isn’t actually a saving. It’s something that you’re going to have to replace a whole lot sooner – and it’s money that is going into the pocket of a profiteering business owner who cares more about their back pocket than they do about where the item actually originated from, or even, god forbid, than where the product that they are importing has come from and how it’s been manufactured.

Many of these businesses KNOW that their items are knocked off from other local designers – but they simply do not care. Many of these business have made claims to “own” the designs. Many of these businesses have made claims that they have their own handmaidens who create these designs for them. And sure, they probably do – but their payment wouldn’t even put bread on the table, let alone pay the rent.

These products are not coming from someone who worked their arse’s off to create the item in the first place. They’re not coming from the creative minds responsible for the item in the first place.

They are coming from those who are piggy backing and taking advantage of an already vulnerable market.

In the brand repping world, I have seen brand reps support these businesses – both unknowingly and knowingly. I have seen brand reps purchase directly from Ali Express only to tag original designers and makers (and sometimes the knock off seller) to “pretend” their supporting small and subsequently progress themselves in the influencer community.

And I have even seen people destash and on-sell their knock off products and pretend that they are the original. They justify it by citing that they are supporting other small business owners in Australia. When reality is they aren’t – by supporting these businesses, you’re only creating a market and a demand for the product.

Don’t purchase, reduce the demand of the copy cat. And by supporting these businesses, you effectively destroy another local business owner, handmaiden, mother… sure, you say you’re supporting a local mum… you’re also destroying another.

Nurture the Nest, who I’ve been supporting for 4 years, repping for 3 years… has once again, had their product designs stolen and replicated for the Chinese market. This is a business who, if I’m being honest, I have seen copied and replicated more than any other, particularly in the past 12 months.

My own photos are being used to promote a product that is not actually the product I photographed. I see firsthand the impact that this has. They do say that imitation is the biggest compliment – but it is also the most heartbreaking.

Is there a solution?

Let’s be realistic though – we can’t eliminate the copy cats. There are no copy write laws in China.

But we can always stay one step ahead. And I’ll be honest, I’m always looking at ways I can save money… but sometimes my moral compass will also remind me that sometimes I shouldn’t have my cake and eat it too – even if it was possible.

We can always create more, design more, design new – make it harder. But we need to remain educated and remember to consider a few things:

· know where you’re buying from – is it ethical and is it really local?

· cheap doesn’t mean quality

· where did the design originate from?

· who is really impacted by it?

Think about the person who really created it – usually, the ideas and design behind it came from a hardworking parent who is designing and creating in their garage, or even on their dining room table, staying up until all hours of the night because that’s the only time they’ve got whilst their kids are sleeping.

It’s up to you – you can choose what you want to do, at the end of the day, it’s your money and no one can tell you how to spend it… no one can tell you who to support.

But what I can do, is educated you!

I can tell you is where it comes from, who is impacted, how they are impacted and ultimately how you are impacted.

If your values and your own moral compass steer you in a direction that supports stealing, or ultimately results in the shut down of the original designer / maker / business then so be it.

That’s on you.

Follow Brooke & Zeta on Instagram @misszetarose

Photo Credits Brooke Staff & Nurture the Nest

 

Mumsonline appreciates a free market model, however wen one player is having such a large impact on smaller players, we need to come together and discuss ways to tackle this problem which could ultimately see the end of genuine small businesses across the world! We would love to know your thoughts on this and if you have experienced a decline in business as a result of similar circumstances! Feel free to comment below or send us an email nicole@mumsonline.com.au

 

2 Comments

  • Liliana Duarte

    Ali Express is been conquering the world for a while with the all cheap prices and 10 replicas of one single product fighting for the cheapest price. It is not fair at all for the small business in Portugal there’s barely small business or they are eaten by the major retailers or the online marketing there is barely space for a good quality small business.

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