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China: A growing, strengthening relationship

Commentary

China is now New Zealand’s number one export destination. While agribusiness, services and smart manufacturing solutions all feature, unsurprisingly food and beverage - New Zealand’s largest category in China - has the most representation.

Recently, New Zealand’s profile in this sector has been driven from the highest levels. We recreated the banquet served to President Xi Jinping in Auckland for media back in China, and created an opportunity for shoppers to buy the same products on online channel Tmall. Using video, photographs and recipes from the event with the hashtag #ExploringXisBanquet, we generated more than a million views across Weibo and WeChat.

This story demonstrates some key areas of opportunity for New Zealand in China. President Xi’s visit demonstrated the quality of official ties, which have real value at a commercial level as well as a governmental one. The NZ Inc presence is increasing - all agencies have boosted resources over the past year and businesses can cascade this down on an individual level. Investing time in building local relationships (from the Chief Executive down) is something you can’t do enough of and essential before committing to a local partnership.

China’s economic rise over the past two decades has lifted incomes and produced a large middle–class population with a demand for products from around the world. Complemented by a desire for food products that are safe and healthy, the positioning for New Zealand in the premium segment is strong and these factors have helped New Zealand become a food provider of choice.

Social media and e-commerce

Social media and e-commerce are a massive opportunity. Leading e-commerce platform Tmall attracts around 640 million consumers, keen to buy branded product they can trust. The President’s banquet campaign enjoyed a prime spot on its first tier homepage, directing tens of thousands of potential buyers to the New Zealand product pages and continuing to build consumer awareness of the range of New Zealand products available.

The Chinese are voracious users of social media, with a multitude of platforms with different characteristics. Of course, converting a social presence into e-commerce isn’t easy – but nearly 80 percent of WeChat users follow marketing and brand-led accounts, and life online is a mega-trend in China. This is the largest e-commerce market in the world, growing at over 50 percent per annum for the past four years – and there’s more to come.

Growing e-commerce is part of boosting domestic demand, and the Chinese Government views development of the mobile network as an important infrastructure play. The twelth five-year plan outlined a target of 1.2 billion 3G/4G mobile users (85 percent of the population) by 2020. This will open up m-commerce to the masses. WeChat has an add-on called WeShop for just this reason.

Emerging middle class

If you are operating in China you quickly learn that the Government plans ahead. These plans are public knowledge, so savvy businesspeople look to target the areas documented for investment.

While the heady days of double-digit GDP growth are over, the emerging middle–class of Chinese consumers continues to grow and to invest in an ever more sophisticated lifestyle – in premium food and beverage products, tourism, creative services and education. And with the emphasis being placed on quality of life, opportunities in areas like agricultural technology, healthcare, architectural and leisure services are opening up.

As the New Zealand – China relationship continues to grow, the award-winning businesses of the future will increasingly be drawn from these areas.

By Glen Murphy, NZTE Regional Director Greater China