Succeeding in the Chinese market was the premise behind the second of a series of China Opportunity seminars hosted by La Trobe University last week. The seminar consisted of three talks from prominent Chinese market experts, as well as great networking opportunities.
The China Opportunity Seminar Program comes following a delegation of SMEs from Melbourne’s north toured Chongqing, China, in May last year. NORTH Link and La Trobe University led the tour with intentions to open food, beverage and fibre businesses from Melbourne’s north up to China’a market.
The four-part series spans from September this year, to March next year, covering a wide variety of topics to help food, beverage and fibre businesses understand the complicated market. Seminar one, held in September, gave participants an entertaining demonstration of Chinese culture and business etiquette. The series will conclude next May when a group of participating partners will be selected to visit Chongqing and Beijing on a delegation tour.
Partners were acquainted with Miku Xiao as the first speaker. Miku is a Chinese market advisor for one of the largest Sino-Australian trade agencies. As part of her role, she provides business solutions for local small to medium sized exporters.
Miku began her talk by giving partners a brief overview to the Chinese markets size and buying habits. China has 1.39 billion people population, with 338 cities. To put the country’s economic scale into perspective, China’s GDP was recorded at US $13.457 trillion in 2017, compared to Australia’s US $1.323 trillion. Despite the demand for Australian product, and the vast land of resources, Australia only makes up 6.14% of China’s imports.
In 2017, USA made up 10.46% of China’s imports. Miku pointed out that due to USA and China’s current situation, Australia has the opportunity to make up more of the market.
Miku emphasised that the health product/health care category has a lot of potential. Making up only 25% of China’s imports, the product area was considered the most likely to rapidly grow. E-commerce and the digital market is paving the way for effective product distribution as apps such as WeChat contribute to up 50% of the supply market share.
Research conducted in China has shown some very positive signs for Australian products. 8 in 10 Chinese research participants say it is very likely they will purchase an Australian product in the next year. The Chinese market has signalled Australia’s natural environment, natural products and high industry standards as factors contributing to the strong demand.
Despite the eagerness for Australian products, Miku identified several factors that are seriously disadvantages Chinese exporting opportunities. Where Australian brands are partly failing is the inability to understand China’s consumer needs. China’s market is accustomed to unique product specifications and branding, meaning thorough research is required to successfully introduce foreign goods. Product design and branding is one thing, but China’s complicated rules and regulations is another. Miku advised that speaking to a Chinese importing consultant will be greatly beneficial to avoiding these issues.
Xin Zhou, a fellow Chinese market expert, discussed two case studies that showcased how a business can fail or succeed in China.
Xin first made example of a European dairy and foods company that is globally successful, with revenue totalling 7.5 billion euros in 2017. The company failed in China due to three reasons. Firstly, they had poor brand awareness. As a small example, they introduced 1L milk cartons when the Chinese market is more inclined to purchase 250ml bottles. Xin pointed out that Chinese consumers want to finish their carton of milk in one go, rather than saving it for later. The other two contributing factors was their complacency due to rapid global expansion, followed by their lack of attention towards the expanding digital market.
Xin made example of a bedding company that successfully introduced themselves to the Chinese market in 2008. It wasn’t until the bedding company took advantage of the digital market, did they begin generating larger revenue. China’s digital market has become so integral that by eventually utilising online platform Tmall, the company begun doubling their revenue by the year. This digital strategy was also complimented by an attractive unique selling point for the consumer.
Before the seminar concluded, Miku and Xin were joined by Zelong Wang for a panel discussion. Zealong has 20 years’ experience in Chinese marketing, and furthermore working for leading regional and multinational companies. The panel were asked a series of questions that touched on effective marketing strategies for Australian food and beverage SMEs wanting to enter China. The panel gave partners some helpful advice, including the need to utilise social media apps such as WeChat and Tik Tok to test products in the market.
The China Opportunity Program is among several China relations activities that MNFG and NORTH Link have undertaken recently. Earlier this year a Chongqing and Beijing delegation tour was led in Melbourne’s north, exposing partners to exporting opportunities. Several tours with 163 Entrepreneurs took place over this year, with the latest taking place in September. 163 Entrepreneurs are a group of local Chinese business owners and suppliers.
The China Opportunity Seminar Program is supported by the Australian Government through the Australia China Council of the Department of Foreign Affairs and Trade.
For any enquiries in relation to Chinese exporting activities and events, please contact Margaret McLelland on 0417 293 570 or through email at firstname.lastname@example.org.