Day 10: Smarts, not scale.

A recurring theme in two meetings today was the need for New Zealand businesses in China to not try and compete on a capacity basis,  with the advantages gained by economies of scale – it’s just not possible. Instead, the need for highly differentiated products and services which target a niche within the market was seen as the only tangible way in which Kiwi businesses can achieve sustained success here in China.

CEO of ANZ China, Dr Charles Li, explained how ANZ’s history and experience as a trade-focused bank enabled it to carve out a niche in China. ANZ has also become a major player in the gold market in Shanghai. Now a market maker for gold – ANZ has become “China’s leading foreign-owned gold bank”.

In addition, ANZ’s super-regional focus has given it first-mover advantage for  New Zealand -related business in the Chinese market. With a presence in China for over 20 years, the bank has been able to generate significant business for itself by providing banking services between China and New Zealand with little Australasian competition.

The same principle was discussed at length by Sandeep Bahl,  Regional Manager for Air New Zealand’s Asian operations. Sandeep spoke of how everything  – flight destinations and frequency, marketing, product offerings and partnership agreements – were  all part of a global strategy to target well-defined segments within the travel market.

I found Sandeep to be an extremely interesting and knowledgable ambassador for New Zealand here in China. Here in China he’s responsible for a team that has done an excellent job in cementing Air New Zealand as a strong market player and with the Shanghai-Auckland route becoming a daily service now (as of yesterday), the potential for growth and expansion of operations beyond private travel are exciting both for the company and New Zealand as a whole.

One of Dr Li’s final thoughts in our meeting today really stood out to me and I’ll leave it as my closing thought for today.

While discussing the FTA, Dr Li lamented New Zealand has not taken full advantage of the unique opportunity China presents. “New Zealand is still the only developed country in the world that has a relationship like it does with China. It needs to make the most of it.” It’s an interesting thought and one worthy of serious thought and discussion. New Zealand currently has somewhat of an open-door to China and the exclusivity of the bi-lateral FTA gives businesses an immediate platform to conduct operations here. That advantage isn’t going to last forever – are we doing enough to take advantage of it or should we be doing more?

Tomorrow Fran and I have an early meeting with Howard Moore,
That’s all from me today – time for an early night.

Wan an!