Catherine Beard traces the journey of NZ Premium Foods into China and shares their tips on surviving and thriving in such a competitive market.
Doing business in China is not for the faint-hearted, but when it’s your first ever export market you’re in for a really steep learning curve! But this didn’t deter Rachael Speedy and her team at NZ Premium Foods. Starting with just one product – foodies premium extra virgin olive oil – they’re developing the export of a range of food and beverages into the Chinese retail and food service markets.
Here are some of Rachael’s ‘survive and thrive’ tips:
1. It’s a long-haul journey.
“China is an inherently difficult market so we decided we needed to learn more about the culture, protocols and how to do business there before we entered the market. Our research helped us develop products specifically suited to that market,” says Rachael.
“It took five years to do all that! So you must take a long-term perspective if you want to go into China. It’s best to have a well-established business in New Zealand and/or elsewhere first.
“We needed to confirm we had the five C’s: the Capability to do so; the Capacity to scale up manufacturing when required; enough Cash so as not to jeopardize the business in New Zealand, the Commitment to stay in the market and the Competitiveness to be there.
“Out of the five C’s from our research, in reality we found we needed five times the length of time and five times the amount of cash to get into China.”
2. Networking in New Zealand.
Rachael emphasized the hugely important role that networking has played in helping NZ Premium Foods succeed in China – both within the Chinese community here and in China itself.
“For the past five years I’ve been building relationships in the Chinese community wherever possible. This led to us finding one of our Chinese market partners, who we were able to meet here in New Zealand.
“Through experiencing the country, they understand New Zealand, our regulations and the product a lot better. Safety is paramount to the Chinese, so it’s great that they can walk into the factory and see it’s absolutely spotless.
“This partner represents our brand in market and has connections into the relevant retail sector, servicing 3000 supermarkets and convenience stores in the Shanghai region.
“We’re competing with the entire world, so we’ve had to select niche markets suited to our premium products. Our partner’s specialist in-market knowledge has been invaluable.
3. Networking in China.
“Be prepared for a lot of networking once you’re in China too – the Chinese way!
“That means meeting the families, dinners out, it’s a whole different world – I can’t even compare the two in terms of culture and how business is done.
“For example, it’s the norm in China to do business over a meal. So a lunch or dinner can go on for hours. And there’s lots of protocol and a hierarchy you need to understand.
4. E-commerce is key.
“Once we’ve established good market partners, we focus on longevity, supporting our brands and getting products moving off the shelf.
“This means growing our presence through e-commerce, and having Chinese experts running a Chinese social media strategy from New Zealand.
“Having an e-strategy is a vitally important ingredient. We post on Chinese social media such as WeChat almost every day, and we’re working on engaging more influencers.
‘We would like to have more Kiwi premium food companies collaborating with us on the e-commerce journey – it lifts the profile of each of the products. So please get in touch!”
Catherine Beard is executive director of ExportNZ, which assists exporters throughout New Zealand. www.exportnz.org.nz