July 03, 2018

China: a golden opportunity for Kiwi companies

China is a big, exciting and potentially highly lucrative market, but if you’re a Kiwi company looking to have a crack, it can be tough to know where to start. There are a few pointers that’ll set you on the right track.

In the year to March 2018, more than $15 billion worth of New Zealand goods and services entered China. That’s a big step-up from just a decade ago when total exports were around $3 billion a year.

China presents huge opportunities for Kiwi businesses, but breaking into the market can be tough.

Fonterra has been present in China for more than 45 years, but its major consumer brand Anchor has only been in the market for five years - a short period compared to many other global players. But within that time, Anchor has grown to be the #1 import milk brand both online and offline and is sold in over 13,000 stores in China nationwide. As a result, Fonterra China is generating more than $3.4 billion in annual sales revenue.

Based on our experience, there are a few key points Kiwi businesses need to consider to be successful in China:

  1. Be present in online sales channels

  2. Make the most of consumer data

  3. Build trust in your product

E-commerce

Getting to grips with the way Chinese consumers make their purchases – likely online or a mix of online/offline - is vital for businesses wanting to get traction in the market.

Over the last 10 years, digital growth in China has exploded. The number of internet users has grown by 35 times to more than 770 million.

Forty percent of the world’s internet transactions now take place in China, so it’s no surprise the nation is also home to the world’s largest e-commerce market worth USD 812 billion – near equivalent to the next six largest e-commerce markets combined.

China’s e-commerce is dominated by two main players: Alibaba and JD. Understand how these platforms work and develop your sales strategy to suit.

Consumer data

A large portion of transactions in China are made over mobile. Mobile phones are used in nearly every aspect of life – from paying for purchases instore to riding public transport.

The sheer volume and frequency of transactions means Chinese consumers input enormous amounts of data online.

Consumer behaviour and preferences can be captured and used to change or even create new products, keeping your business ahead of emerging trends.

Traceability

The digitisation of shopping has also increased the prevalence of traceability, with many brands introducing QR codes that allow customers to trace products from source to shop.

Trust in source is not to be underestimated in China. Consumers will pay a premium for brands they know and have faith in.

By embracing the dynamic retail world, New Zealand businesses can seize the exciting opportunities in China.

Digital has broken down the barriers to entry, so if you’re thinking about taking the plunge and entering the market, now’s a great time to do it.

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