Australia Merino Sisters head marketing campaign as Australian wool trade becomes more reliant on China

00:41  30 october  2020
00:41  30 october  2020 Source:   abc.net.au

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In 2018, the Australian wool industry is celebrating more than 50 years of successful wool trade to China , a relationship that has established China as “ China and Australia are innovating towards a shared future in Australian Merino wool by developing new wool textiles and manufacturing

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a herd of sheep standing on top of a grass covered field: The Merino Sisters head up a wool marketing campaign in China. (Supplied: Australian Wool Innovation) © Provided by ABC News The Merino Sisters head up a wool marketing campaign in China. (Supplied: Australian Wool Innovation)

Three sheep are helping round up a retail revival for Australian wool in China.

So far, 230 million people have seen the quirky commercial of 'the Merino Sisters' spruiking the prestigious and versatile fibre.

The marketing campaign is the work of woolgrower-funded Australian Wool Innovation's (AWI) The Woolmark Company.

AWI chief executive officer Stuart McCullough said it was providing the certainty the industry needed given the recent trade tensions Australia's beef, barley, wine and cotton sectors have been caught up in with China.

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"We're working closely with the government and our industry partners in China to make sure our contacts are being well engaged," Mr McCullough said.

"There are things that are in our control, and industry relationships are well within our control, but government-to-government relationships are not within our control.

"There are not many other alternatives for China in terms of their purchasing of wool, we are the biggest supplier of apparel wool to the world and they are the biggest buyer of apparel wool, so it's not as if there's another alternative that they can go to."

Losing faith in lockdown

Australian Wool Innovation made the call in mid March to pull out of its global marketing campaigns as the pandemic heightened, lockdowns continued, and retail spending plummeted.

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Australian Wool Innovation provides wool production forecasting, retail and trade market reports, consumer insights and trend monitoring The Australian Wool Production Forecasting Committee estimates sheep numbers, sheep shorn, average cut per head and wool production, three times a year.

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Both India and Italy are buying very little Australian wool at auction back to 3 per cent and 2 per cent respectively — in 2018/19 they were taking about 5 per cent of the clip.

"The clubhouse leader, by a long way at the moment, is China and in April we started working on a marketing strategy as we felt that they would be the first to come out of this," Mr McCullough said.

As a result it launched the Merino Sisters campaign in China, which is aimed at making "prestigious Merino wool the most coveted winter fibre".

"The China campaign is about communicating Australian wool's natural benefits to a digitally savvy, highly sophisticated Chinese audience," Mr McCullough said.

The advertisement features three humorous interviews by Chinese celebrity Loura Lou with three Merino ewes.

"It allows consumers to learn about the superiority of Merino sheep genes and the unparalleled benefits of 'Merino: the Treasure Wool'," Mr McCullough said.

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The Woolmark Optim WR Jacket has been produced especially for woolgrowers, to enable wool levy payers to experience the benefits of Merino wool in an innovative way. The unique, high performance fabric is wind and water resistant and made from 100 per cent Australian Merino wool .

Australian Merino wool is the world’s best wool . Coming from Merino sheep, it has qualities that no other fibre, such as cashmere, cotton or polyester can match. Some wool is softer than cashmere, while others are hardier and more resilient, suitable for carpets and bedding.

The Merino Sisters campaign featured on China's leading e-commerce site Tmall.

AWI reported the campaign has generated more than 230 million impressions and 9.9 million video views, with the teaser post by Loura Lou achieving 2 million views in less than 24 hours on Weibo.

Elsewhere, Mr McCullough said South Korea, Japan and Germany were starting to look more positive and AWI was considering starting some test marketing campaigns in those countries.

"We'll have to be very nimble this winter to deploy marketing projects quickly in the market at the right time, bearing in mind seasonality," Mr McCullough said.

"We're still particularly concerned about Italy, the UK and the US.

"They're big, important customers to us."

Limited alternatives to China

Mr McCullough said China was the perfect partner for Australian wool.

"They take more than 80 per cent of our wool clip and they have the perfect climate and affluence for the consumption of wool, and they have a high population," he said.

"They're a very unique partner from a manufacturing point of view, but also from a consumption point of view as they are now consuming half of the Australian wool clip they buy domestically now."

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Australian wool has many unique benefits that enable us to promote it in lucrative markets in which consumers are willing to pay a premium price. “Despite poor seasonal conditions and uncertainty. over international trade relations, woolgrowers have benefited from the results of AWI’s marketing .

The Woolmark Company is the marketing subsidiary of Australian Wool Innovation and has 16 offices around the world in key markets for wool . The Woolmark Company focuses on fostering talent, developing new innovations, and helping businesses realise the benefits of Australian Merino wool .

AWI is hoping to capitalise on China's population of 1.4 billion people with its economic recovery during the pandemic.

"It's the only economy in the world that we can see with any GDP [gross domestic product] growth at the moment," Mr McCullough said.

"Every other macro economy of the world that consumes our product is in negative GDP growth.

"And China seems to be coming out of COVID [well] with a V curve."

Demand flows through to wool market

At wool auctions in Australia the increased demand from China is being noticed by brokers, despite the market in a seesaw pattern at the moment.

Last week the Australian Wool Exchange (AWEX) Eastern Market Indicator (EMI) lifted a massive 102 cents to 1,219c/kg, however, this week it landed back at 1,138c/kg after 81c/kg was swiped from the EMI.

Southern NSW wool broker Marty Moses said while the wool pipeline had been sitting idle for a while there was finally some pull through as demand in the knitwear market — particularly online — was rising.

"In China they are now cutting full lengths of wool in half to meet the requirements of the knitwear sector, which uses what's called an open top — a shorter fibre length," Mr Moses said.

While he saw this as a positive sign for retail recovery, Mr Moses said he was still wary of any potential trade tension.

"Our politicians have got to be really careful of the actions they instigate as we can't really have any political taint going in there," he said.

"China is heavily invested in top making and processing, and Australian wool makes up a big part of what they do — one would think that if we tread the line and keep our mouths shut, we should be right."

Mr Moses said, in the past, China promptly locked South Africa out of the market when it was claimed it had a foot-and-mouth disease outbreak.

"We need to be really careful, because without China in the market, we don't have one at this point in time," he said.

"They're critical to our industry as they move out of this crisis that we're in with the COVID shutdowns around the world."

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