E-commerce takes on new meaning for New Zealand businesses in Chinese market

The sixth annual China Business Summit 2020, organised by NZ INC. and Auckland Business Chamber, attracted record attendance and plenty of high spirits in the Cordis Hotel’s ballroom.

Maybe, it was because the summit was the first major conference since the Covid-19 lockdown and the business leaders were excited to get out and network.

But more importantly the 320 business leaders spread the message that: “Out of a crisis comes opportunity.” The terms “new abnormal” and “re-imagined future” were bantered around.

Supply chains and in-market distribution were disrupted for New Zealand exporters, not just in China, and the delegates at the summit talked about an emerging trend: E-commerce.

Businesses switched to promoting their goods and services online and got closer to consumers to keep sales flowing. The businesses sold the New Zealand story of fresh, quality products backed by strong food safety and security – and they quickly learned to be agile and flexible in supplying the changing markets.

Dairy giant Fonterra has a team of 150 people on the ground in China but they couldn’t visit their customers. Fonterra, for example, set up online presentations on cooking with butter and they attracted 1 million viewers.

“A quarter of our farmers’ milk goes to China and dairy continues to grow,” said Fonterra chief executive Miles Hurrell. “Consumption outpaces local production, and we’ve never been in better shape than we are now.”

Global marketer Zespri normally conducts in-store tastings at the start of the selling season and it went online to promote the goodness of kiwifruit. “We pushed the Vitamin C benefit and that helped sales – the retailers allowed us to drive sales in China through e-commerce,” said David Courtney, chief grower and alliances officer with Zespri.

Jade Gray, founder of Gung Ho! Ventures in China, said Covid-19 has caused consumers to rethink their diets and they are moving to plant-based protein foods. “We are jumping in by providing New Zealand solutions for the Asian markets using food technology and data,” he said.

Pier Smulders, country manager New Zealand for Alibaba, told the delegates that the shift to online e-commerce was huge and digital was coming into its own.

Alibaba’s NZ Country Manager Pier Smulders speaking with panel moderator Tim McCready.

Alibaba’s share of the total online retail market grew from 20 per cent to 25 per cent in the first half of this year. The growth in global online sales has been $US100 billion in the past six months, and Smulders said “you only need to get a little piece of that growth to be successful.”

He said consumer behaviour (in China) was changing. They want higher quality products and they want to know where they come from. “It’s important for businesses to engage meaningfully with their customers and to keep Brand NZ alive.”

Smulders said one of the opportunities was to engage with the two million ethnic Chinese in Australia. They used the same digital tools as those living in mainland China. “By targeting that group, this would form a powerful niche within a Trans-Tasman bubble.”

China Travel Service (NZ) has been a strong ambassador for New Zealand but its tourism business dried up because of the Covid restrictions.

“When the border closed we had zero income and we had to try other things,” said Lisa Li, managing director of China Travel Service (NZ). “We shifted our social media to marketing non-travel goods.

“We were working with New Zealand Trade and Enterprise (NZTE) and Auckland Airport to support the New Zealand Food Basket. We wanted to bring Chinese visitors here to taste and experience premium New Zealand product.

“The products are still here. So we used our extensive customer database to move the products to them. These are customers who have been to New Zealand and are loyal to the New Zealand brand.”

Professor Jenny Dixon, deputy vice-chancellor strategic engagement at Auckland University, told the summit that the university has established two learning centres in China where students participate in online learning and face-to-face tutorials.

The university is providing a NZ$1000 relocation allowance for Chinese students who can study arts, education, engineering, science and economics.

Auckland University brought forward its plans to deliver courses online because of the Covid crisis. “We have 9000 international students and 50 per cent are from China. Some of them are on campus and others couldn’t reach us. We moved into the digital delivery business pretty quickly,” said Professor Dixon.

She said the university was closely watching the (Covid) impact on international students. “We can organise quarantine for students, but the digital initiative could lead to the transformation of the university sector if the pipeline of international students slowed,” she said.

Charles Finny, NZTE director and former New Zealand deputy chief of mission in Beijing, said Covid hit at the peak of the New Zealand export season. “The fruit was ripening on the vines and exporters were preparing for Chinese New Year. We focussed on e-commerce with online presentations and enhanced market intelligence.

“We found we became a major air freight operator working with Ministry of Transport and a number of airlines. We assisted with 200 flights to move high-value, perishable goods.

“Bits of the supply chain were so close to shutting down and we were dealing at senior levels of government departments. We got things sorted very quickly and we kept in problem-solving mode. The Chinese market held up well,” he said.

Another opportunity, promoted by NZ China Council executive director Rachel Maidment, was developing Auckland as a hub for air freight and passenger movements between South America and China and other Asian markets. The Southern Link was a concept driven by the memorandum of understanding on the Belt and Road Initiative.

It would bring these countries closer together and put Auckland in the centre, rather than on the outskirts, of the map, said Maidment. It would shorten flying times and have an impact on trade, as well as environmental. Having more flights would also benefit New Zealand exporters, and during the Covid crisis two Latin American airlines actually flew the Southern Link.

She said “we will be commissioning a Southern Link study that looks at the challenges that lie ahead and what existing trade and passenger flows will look like in a post-Covid world.”

All in all, spirits were high at the summit and China will continue to provide great opportunities for New Zealand businesses and entrepreneurs – so long as they build long-term relationships and understand the changing behaviour of consumers.

– Graham Skellern, © NZ INC.

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