Optimising Returns from China: What are the Strategies for Reaching the Right Customer Segments? What’s Changing and How is New Zealand Placed to Play?
David Green (Moderator), Managing Director, Institutional New Zealand, ANZ
- Professor Keith Woodford, Agri-Food Systems, Lincoln University
- Dean Hamilton, CEO, Silver Fern Farms
- Chris Hopkins, CEO, Scott Technology
Dean Hamilton emphasised a key demand of the rising middle class is for meat products. For example, the hotpot trade in China has grown dramatically, moving from Northern China to the rest of the country, with quality from cheap takeaway offerings right up to silver service. Accordingly, Silver Fern Farms’ beef sales have grown from $3m per annum five years ago to some $160m in the last 12 months.
Huge opportunities exist for New Zealand food producers in the form of retail-ready products, rather than just commodities. Hamilton sounded caution though: “The prospect of having product transported at zero degrees through the streets of Shanghai is quite frightening.” Fortunately, the recent Shanghai Maling investment in Silver Fern Farms will play a valuable role in ensuring distribution capabilities within China are strengthened, easing some of these concerns.
Chris Hopkins of Scott Technology, spoke of the the importance of having key personnel on the ground in China. It is not just a matter of getting a deal done, but ensuring that follows through into a real and fruitful business relationship: in China, “the negotiations only begin once the contract is signed.”
This need for a presence in China was given a tangible solution in the address of Professor Keith Woodford, who called for the development of an online portal for NZ agri-products. This is vital, said Professor Woodford, in order to propel ourselves onto the same level as the large international companies we compete with in the Chinese market. “In almost every value-add industry, we are losing market share.”
Questions for our readers:
- What what help companies get on the ground in China?
- What do you think about on-line portals for selling to China?