Ziqing Wang
Monash University
Gitanjali Bedi
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Australia has stringent control of its healthcare products through the Therapeutic Goods Administration (TGA) and strict legislation compared with other countries. This has earned it a great reputation (McEwen, 2007). Thus, DCO is trying to bring these high-standard health products to the Asian market - especially China - through a paperless and cashless trading system. This expansion will give Chinese people the opportunity to experience Australian-standard healthcare products.
In the short-term, customer satisfaction will be maximized through the thousands of products available to choose from. In the long-term, this new trading system will enhance public health, customer confidence and profitability in China.
As Coresight Research shows, in 2014, 68% of Chinese people used mobile payments to make a purchase and this number is still increasing. Therefore, DCO developed a paperless and cashless trading system to build better customer relationships and improve market share.
Customers in China can use this cross-border e-commerce system to place orders online and pay by mobile payments such as Alipay or WeChat Pay. Moreover, DCO's receiving, purchasing and logistics systems are all paperless and cashless, which will realize cost minimization and result in better energy-efficiency (Gross, Neely & Sidgman, 2015).
Furthermore, each email DCO sent ended with a message about encouraging less paperwork. Thus, recipients, both inside and outside the company, will be educated to be more environment friendly. This will help DCO form a positive social image of supporting sustainability in communities.
Everyone in DCO is involved in the creation of this new trading system, and each one of them has contributed differently. Directors have decided to expand to the Asian market and set long-term goals. Managers then have made marketing or management plans in details and ask employees take actions such as doing trade systems programming.
DCO has accumulated a good reputation and expertise in health products as they have 12 years' experience in offering healthcare products and services in Australia. Hence, DCO intends to expand into overseas markets by delivering those products to China to meet the health needs of Chinese people. The implementation of this paperless and cashless system in international trading will make the whole process more efficient, sustainable and profitable.
DCO has achieved four of the UN Sustainable Development Goals (SDGs) which are in the following:
- Goal 3 Good health and well-being
Chinese people will enjoy the same healthcare products as Australians through paperless and cashless trade systems. This innovation created by DCO will help to meet all the health needs of customers and bring good well-being to the community.
- Goal 8 Economic growth
More business activities will be encouraged as paperless trade can increase gains in exports and reduce public administration costs. Moreover, both customer and supplier management can be improved because the use of digital payments is fast and convenient. Therefore, DCO will earn more revenues which may strengthen the economic incentives.
- Goal 9 industry, innovation & infrastructure
DCO has identified the unmet market needs in China and created this new trade system accordingly. As trade costs are reduced, DCO will save money to upgrade internal infrastructures or backup systems.
- Goal 11 sustainable cities and communities
Paperless and non-cash trade can improve transparency and reduce frauds. All exported goods can be tracked efficiently, any trades that make no commercial sense will be exposed. This can avoid risks and realize sustainability for civil society.
Implementing paperless and cashless trade can contribute to establishing a sustainable "commercial-enabling environment", which will drive cost reduction and trade facilitation enhancement with value-added activities (World Economic Forum, 2017, p6).
Firstly, trade costs can be reduced via paperless and non-cash trade by using an e-commerce platform to access overseas markets (World Economic Forum, 2017). DCO's profitability will be improved as printing costs or labour costs will be minimized. They can spend more money and time to manage additional trade documentation (Sison, 2018).
Secondly, this new trading system can create an efficient supply chain because both customers and suppliers of DCO will use digital payments instead of cash or credit cards. This drives a step change in security and convenience (Khalil, 2016). Purchasing by credit cards may cause delayed payments, so DCO may incur bad debts if someone cancels the order. Unlike paying by credit cards, to use mobile payments such as Alipay can minimize bad debts incurred as all payments will be immediately received.
Additionally, as electronic messages move much faster than physical merchandise, implementing paperless and cashless trade systems can be a convenient approach that easy to build trust between business and customers (World Economic Forum, 2017). This will increase sales revenues and facilitate domestic economic growth as well.
"Customers in China will use this trading system to make purchases online just like what they have experienced in Australian pharmacies", said Chief Operating Officer Ryan Huang in an interview. All information about products include prices, ingredients, and delivery methods are clearly stated on the website. Paperless and cashless trade can improve transparency and maximize customer satisfaction because there will be less information asymmetry in the process.
What is more, this trading system can enhance traceability that has been sought by customers, business and government (World Economic Forum, 2017). Paperless and cashless trade systems are timelier and easy to be tracked. In addition, it can help DCO to tackle any counterfeit or illegal trade that is exported. Therefore, this system generates growing social security concerns for DCO and reduce community risks.
Lastly, more revenues earned means higher taxes need to be paid. Thus, the government will receive more income to benefit the whole society such as improving social security or Medicare.
From the environmental perspective, reducing paperwork will cut down on pollution as it can save water and tree usage. Moreover, customers can use this paperless and cashless trade system to place orders and receive goods at home. This will encourage people to drive less and to be more environmentally friendly.
Reference list
Coresight Research. (2018). Deep dive: Mobile Payments In China. Retrieved from https://www.fungglobalretailtech.com/research/deep-dive-mobile-payments-china/
Direct Chemist Outlet. (2016). Direct Chemist Outlet Discount Chemist. Retrieved July 29, 2018, from http://directchemistoutlet.com.au/aboutus
Gross, A. D., Neely, D. G., & Sidgman, J. (2015). When Paper Meets the Paperless World. CPA Journal, 85(5), 64-67.
Khalil, I. A. (2016, August 8). The Rapid Growth Of Fintech: A Revolution In The Payments Industry. Retrieved from https://www.entrepreneur.com/article/280402
McEwen, J. (2007). A History of Therapeutic Goods Regulation in Australia. Canberra, Australia: TGA.
Sison, M. (2018, April 16). Benefits of paperless trade. Retrieved from https://www.scidev.net/global/trade/news/benefits-of-paperless-trade.html
World Economic Forum. (2017, November 2). Paperless trading: How does it impact the trade system? Retrieved from https://www.weforum.org/whitepapers/paperless-trading-how-does-it-impact-the-trade-system
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Ryan Huang, Chief Operating Officer
Direct Chemist Outlet (DCO) operates a chain of retail pharmacies aimed at meeting all customers' health, prescription medicines and beauty needs. The first store of DCO was opened in 2006 in Werribee, Victoria. It has since grown to over 40 pharmacies throughout Australia (Direct Chemist Outlet, 2016). Adhering to the core mission, DCO aims to provide the best quality service at the best price and internationalize Australian healthcare products (Direct Chemist Outlet, 2016).