How would you like to reach 300 million Chinese consumers with a hunger for top quality food and beverage products?
China’s demand for high quality Australian products is at an all-time high – and the boom is predicted to continue for decades to come.
So how do you tap in to this lucrative market? That’s the big challenge now facing Australian food and beverage producers.
The Victorian Employers’ Chamber of Commerce (VECCI) through VECCI Export Services Pty Ltd is helping Australian exporters break down the barriers for doing business in China.
Earlier this year VECCI Export Services launched a new e-commerce platform to give exporters of non-perishable food and beverages unique online exposure to mid to high-income Chinese consumers.
VECCI has partnered with Shanghai-based Yiguo E-Commerce, which boasts a rapidly growing customer base of registered consumer and corporate accounts.
With Yiguo.com, Chinese consumers can browse and buy Australian goods on display online in the Australian Pavilion – listed by product and company.
VECCI’s general manager – international trade, Patricia Griffiths says the new e-commerce platform, available with Mandarin and English versions, has been two years in the making.
Ms Griffiths says Australian exporters are perfectly placed to take advantage of the food and beverage boom in China.
“China’s rising middle class is very discerning, she told Dynamic Export. “They want high quality food produce … and Australia has an excellent reputation as a ‘clean, green’ supplier.”
Ms Griffiths says China, the world’s largest food importer, has 300 million middle-class citizens seeking high quality clean, green, healthy and safe food and beverage products.
China’s middle-class is expected to grow to 500 million by 2017.
“And these people are willing to pay a premium for top quality goods,” says Ms Griffiths.
China’s Internet users are expected to reach 700 million next year – almost twice the number in the US and Japan.
What are you waiting for?
Ms Griffiths says there’s never been a better time for Australian businesses to tap into the Chinese online market.
Businesses can sign up to VECCI Export Services’ e-commerce platform with a sample process to evaluate their products in terms of product suitability, market acceptance, taste, packaging, price and compliance.
If the products get the tick of approval from Yiguo, the doors are then open wide for orders to be placed.
Breaking down the barriers
According to VECCI Export Services, a number of challenges have previously restricted Australian businesses from capitalising on business opportunities in China.
The top five challenges include:
1. Contacts and networks
VECCI says business in China is very much built on networks and “guanxi” (relationships). Without these relationships, long-lasting business partnerships are almost impossible. The Chinese term "guanxi" can, at times, equal the term "networking." The elements of exchanges based on "guanxi" carry a long tradition in doing business in China and Chinese communities. Good "guanxi" can be the key needed to opening doors otherwise closed.
2. Chinese market knowledge
While there are more than 1.35 billion people living in China, VECCI Export Services says there is a big difference between a large population and a large market. Businesses should first determine whether their products or services are suitable for the Chinese market.
They should then choose the best place within the country to focus their attention.
3. Compliance and local logistics
Understanding how to do business in China is also one of the major barriers for SMEs looking to export their products to the market. VECCI Export Services says doing business in China is completely different to operating in Australia. It can be complex, with many compulsory requirements.
Everything is different – including red tape and the role of government in business.
VECCI Export Services assists Australian exporters to cut the red tape and deal with compliance and logistics issues.
4. Budget and resources
Building a brand and promoting products in China can be an expensive exercise.
To ensure ongoing business development in China takes time, money and resources, says VECCI Export Services.
Exporters must ensure they have a sufficient budget to market their products.
5. Culture and language
Culture and language play a big role in effectively doing business in China. VECCI Export Services warns that if you don’t understand the culture or speak the language you will never forge effective relationships and strategic partnerships in China. Misunderstanding and miscommunication often leads to a crumbling of business relationships.
Giving exporters a helping hand
Businesses that sign up for the e-commerce platform are helped to overcome these challenges with assistance through the entire export process.
VECCI Export Services will:
- Facilitate the development of an individual customised microsite that will sit in the Australian Pavilion on www.yiguo.com to assist your company in showcasing its products
- Assist in the export process by sending products to China via a Melbourne-based consolidated freight company.
- Manage your import regulations obligations. This includes facilitation of China inspection and quarantine clearance processes and co-ordination of freight forwarding.
- Coordinate warehousing, transport and delivery of goods to yiguo.com
- Manage your inventory
Sales and delivery
Products are sold to consumers through yiguo.com and Yiguo collects payments and ships goods to customers. When goods are sold, Yiguo.com remits payment to exporters via a licenced Chinese importer.
To join the VECCI Export Services China e-Commerce Platform or to find out more contact:
Tom Winters Ph: 03 8662 8662 or email@example.com