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FOOD & BUSINESS IN CHINA Rotterdam – May 10 2012
Today’s choice shapes the future
DUTCHMAN HENK TEROL IS THE OWNER OF MARKETING AND COMMUNICATION
CONSULTANCY ADMARCOM.
WITH OVER FORTY YEARS OF EXPERIENCE IN MARKETING AND DEVELOPMENT, HENK
VISITED CHINA NUMEROUS TIMES. ONE OF HIS PROJECTS WAS THE
INTRODUCTION OF GREEK GOURMET PRODUCTS IN THE RAPIDLY MATURING
CHINESE RETAIL MARKET.
WHILE TRAVELING THROUGH CHINA, HE WORKED EXTENSIVELY WITH DISTRIBUTORS, RETAILERS AND OTHER STAKEHOLDERS. AND SOON HE WAS ASKED TO BECOME MASTER OF CEREMONIES OF ONE OF HIS BUSINESS PARTNERS. TODAY HENK IS YOUR MASTER OF CEREMONIES.
Content:
“Europe will play a smaller role in the world at the
end of the century.
The rise of China is unstoppable: China will be the
new centre.”
Jacques Syben, Professor Monetary Economy at the
University of Tilburg.
Urbanization Why China? Consumers Retail in China Food & Beverages in China Business in China Questions
20 YEARS FROM NOW CHINA'S WILL BE THE LARGEST ECONOMY IN THE WORLD.
ESPECIALLY WHEN CHINA IS LESS EXPORT DEPENDENT
AS DOMESTIC CONSUMPTION GROWS
URBANIZATION CHINA
Retail & Retail Suppliers With Export Plans To China
China Population developments
China’s total population will peak at 1.4 B. around 2019
After 2019 decline rapidly By 2024, 58% of Chinese will
be over 40 years of age.
Urbanisation CHINA
Tier 1Beijing (Capital)ShanghaiHong KongTier 2ChongqingChengduHangzhouGuangzhouJi’nanNanjingShenyangShenzhenTianjinWuhanXi’an
Tier cities CHINA
Population Developments CHINA A fifth world in China Less stringent growth and changing regulations lifestyles In 1950 lived less than 13% population in the city Currently, 40% Forecast for 2030: 60%The one-child policy reinforces aging. This percentage is expected to increase to 22 percent in the year 2030
China urbanization in factsCity developments : source Champs, fastest growing cities
http://www.eiu.com/subscriber_promos.aspx
Population in 2000 Peak population (year)Pearl River Delta “City” 16.6 m 31.2 M (2034)
Guangzhou, Shenzhen, Dongguan and Foshan
Jingjin 16.6 M 31.1 M (2035)
Beijing & Tianjin Current Beijing 16.8 MCurrent Tianjin 10.8 M
Yangtze River Delta “City” 14.8 M 21.6 M (2031)
Chongqing 6.2 M 11.2 M (2027) Current 32 M
Chengdu 3.9 M 11.1 M (2035) Current 10.4 M
Zhengzhou 6.7 M 10.1 M (2039) Current 7.2 M
Xi ‘an 4.6 M 10.0 M (2035
Changzhutan cluster 3.7 M 9.7 M (2034)
Nanjing 3.5 M 7.2 M (2035) Current 7.7 M
WHY CHINA?
Retail & Retail Suppliers With Export Plans To China
Why China?China Facts
China 2th economy of the world
Shanghai and Tianjin area most develop part of China
2 & 3 tier cities fast growing areas in China
European entrepreneurs meats new opportunities with SME in China
Yearly growth expectations +/- 9-10%
Till 2020 population top 20 emerging cities grow by 27% to 85 M, making Central China a global hotspot for business opportunities
2011 average income rich 20 cities were 42% higher than 20 emerging cities.
By 2020 that gap is almost closed.
Why China?China Facts
Opportunities in emerging cities? Fuelled by construction, rising
income and home ownerships, spending on appliances and cars.
Factors beyond growth: Level economic developments IT connectivity Education Healthcare Average wages and pollution
New retail challenges Food
Why China?China Facts
CHITRACON CHINESE TRANSLATIONS, INVESTMENT CONSULTING & RECRUITMENT
Economic Grew CHINA
Chinese economy: 2012: grew ..% 2011: grew 9% 2010: grew 10.3% 2009: grew 9.2%
22 China provinces report GDP over US$158 billion.
Income Developments CHINA 2011
Changes and challenges ahead Politics: party bureaucracy and the
challenges ahead of a fast-changing society
Economy: Government control and entrepreneurial spirit
China and the world: Nationalism and Foreign business
Infrastructure: hard and soft (still bad areas)
Demography: education and workforce Management: The international manager Production: The law, supply china and
quality Growing middle classes and life style
products
(1) Calculated using purchase power parity exchange rates. Source: Citi Investment Research & Analysis report “Global Growth Generators,” February 2011 and Pricewaterhouse Coopers, “UK Economic Outlook,” November 2009.
Dutch export CHINA till 2011
Trade facts 2011
CONSUMERS
Retail & Retail Suppliers With Export Plans To China
Chinese Consumers
Consumer Trends China
Young Chinese consumers
Important to know• Trend Sensitive• Brand Sensitive• Brand Loyalty• Western/European – oriented by far (fresh, safety, quality
and luxury)• FEATURES:• 15% population is between 15 and 24 years old;
• 260 million critical potential consumers (middle class)• Major impact by increasing purchasing power• Important for business strategy
RETAIL IN CHINA
Retail & Retail Suppliers With Export Plans To China
Shopping Shanghai
Shopping Shanghai
Sheng da Plaza – Pudong
Sheng da Plaza – Pudong
GLOBAL RETAILERS
Retail & Retail Suppliers With Export Plans To China
China Retail companies owns mostly the hole supply chain
Sir Ka-shing Li, is a wealthy businessman from Hong Kong. He is the richest person of East Asian descent in the world and the sixteenth richest man in the world with an estimated wealth of US$16.2 billion on 13 February 2009. Presently, he is the Chairman of Hutchison Whampoa Limited (HWL) and Cheung Kong Holdings; through them, he is the world's largest operator of container terminals and the world's largest health and beauty retailer.
http://www.hutchison-whampoa.com/eng/index.htm
Global Retail China
Global Brands with Experience Retail China
Cooperation's
Sheng da Plaza – Pudong
NEDERLANDSE RETAILERS
Retail & Retail Suppliers With Export Plans To China
Shopping Shanghai
Important organizations to know for food CCFA Dutch embassy and NSGO’s Dutch consulates (Shanghai,
Sheng da Plaza – Pudong
FOOD RETAILERS CHINA
Retail & Retail Suppliers With Export Plans To China
Developments food & beverages retail China
• Imported products successfully in hypermarkets and specialty stores /
supermarkets
• Categories snacks and fruit deeper penetrated
• Buyers for supermarkets and convenience stores show increased interest in
products from abroad
• Shanghai has 82 hypermarkets in 78% of total volume in Chinese hypermarket
• Known formulas such as Carrefour and Wal-Mart benefit greatly from
awareness, offer quality products, hygiene fresh, faster circulation and thus
security for their (fast) growing consumer share• http://www.youtube.com/watch?v=ZL5jOGUN_Ms
Hypermarket, with extensive range of fresh and packaged food and
non food products.
Besides Shanghai, a total of 156 branches and offices in major
cities in China including Beijing.
http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy/BSTR246.htm http://www.express.be/business/nl/economy/carrefour-succesvol-china-dankzij-lokale-orientatie/83898.htm
Carrefour
• Formula with many
young Chinese
consumers.
• Extensive range
with European
products
from almost all
countries.
• Didn't found Dutch
brands during my
visits.
• Retail position: only
Shanghai and Beijing
City Shop
City Shop
Sheng da Plaza – Pudong
FOOD & BEVERAGES
ETEN EN DRINKEN IN CHINA
•
Food & Beverages China• Chinese regio's sterk wisselend
qua smaakbeleving• Ingrediënten en lokale producten
zijn sterk verschillend• Chinese keuken is verschillend,
pittig, zoutig en zoetig• Veel gerechten hebben een
lokale traditie• Proberen en communiceren• Veel TV-kook en
bereidingsprogramma’s
Facts & Figures Food consumption 17% + per jaar 2004-2011 Verdubbeld 2006-2011 525 Euro per jaar per persoon Shanghai =Euro 825,- Beijing & Guangdong = Euro 700,- Waarde van de Yuan steeg 9.5% - Verkopen in F&B steeg 2011 18.3%
Consumer, Producer and Food Price inflation
•
What’s going on?• Ontwikkeling consumptie
China• Groei en toename van
moderne retailformules
• Groei van 2e en 3e tier steden
• Veranderende leefstijlen• Kwaliteit belangrijker• Betrouwbaarheid van
merken is belangrijk• Eigen merken ontwikkeling
Usefull to know• Groeiend inkomen heeft invloed op leefstijl
en eetgedrag• Jonge consumenten op zoek naar gezonde
producten die inspelen op gemaksbehoefte
• Op zoek naar nieuwe recepten en toepassingen in hun (nieuwe en bestaande) kookstijl
• Kritisch, onderzoekend, zoekt naar klantervaringen, deelt zijn mening met anderen
• Groeiende beschikbaarheid van vers en verpakt voedsel via hyper - en supermarkten van lokale en internationale retailers
Business in China?
• Characteristics and habits• First Step
• Corporate culture• Guanxi (Relationship Development)
Preparations
Information is available!!!!
Zakendoen met China, de ‘’nieuwe’’ wereldspeler
Zaken doen in China “denk Chinees’’ of werk via Chinezen
Zaken doen in China relaties ‘’guanxi’’
Zaken doen in China tegenprestaties of ‘’you scratch my back, I’ll scratch yours’
Zaken doen in China geen agenda
CHITRACON CHINESE TRANSLATIONS, INVESTMENT CONSULTING & RECRUITMENT
Zaken doen in China geduld
Zaken doen in China wie is de baas?
Zaken doen in China eten
Zaken doen in China drinken
CHINAMy experiences:
Doing business in China has the best chance of success if you go into young consumers, their environment, their interests, their social environment, their activities and of course the culture, language and history.
Of course your preparations, market circumstances, environment, product availibity, distribution partners, category knowledge, export plan and strategy, marketing support, introduction ideas, etc. etc.
First Step Greetings and rituals Meetings Reciprocity and
communication Respect and trust Body language Corporate culture Dinner
Features & habits
INTRODUCTIONIntroduction• Usually through a exhibition or a match
meeting.• Business Cards ritual (Chinese bc to)• Greetings, titles, topics of conversation.• Always interested though it may often
not so• Hierarchy is often seen and felt• They are complimentary and quite
properly, the first step toward developing relationship.
• If a follow up to make it clear that.
CORPORATE CULTURE:DISCOVERY AND RELATIONSHIP
• The mentality and the language, in different regions in China show large differences.
• It is important that you, if you want to do business, select before a (your )region and concentrates on it.
• Negotiate and liaise with Chinese require patience and tact.• Chinese are reliable, but hard and tough negotiators skilled in the opposite
playing off of each other competitors.• Treat them as equals and try a build up good personal relationship with you
personally.• Presents your business card (written in English and Chinese) with both hands.• The first meeting the aim of your Chinese partner is mainly focused on the
close friendship and mutual understanding.
CORPORATE CULTURE:DISCOVERY AND RELATIONSHIP
Avoid confrontations. It is better to lie than someone suffering loss of face, especially when it
comes to someone you later might need. All Chinese relations are based on a network, but these networks are
business far outweigh the networks that we know in the West. Respect and respect are very important to your Chinese partner, but also for
yourself. By someone in public to lose leave that person lose face. Nothing is worse than that! Not only the relationship with the person who
has suffered loss of sight is disturbed, but also with those who were present. Face you can get and give, but should not lose and lose.
Chinese Relationship Development
RELATIONSHIP WITH OUR FAMILY AND IMMEDIATETaking pictures is important. Establishing a relationship and the resulting development is a testimony. Our guanxi. WEDDING CEREMONY
OF THE RELATIONSHIP OF COLLEAGUESOur flexibility and curiosity, we were invited to a wedding in Tianjin.
Guanxi as we were concerned at the official ceremony. The final wedding blessing is traditionally celebrated. Guanxi to Henk was awarded that honor. Couple and family extremely proud. In Chinese greeted and thanked attendees for coming. During dinner we were escorted by two men, supplemented by the rest of the men's table, cigarettes and beer continuously supplemented..
"Business" and "Private" are of equal significance. It comes in both cases on respect and trust that the
relationship is balanced..
Relationship development
Preparations• Homework China• Export plan• Marketing the products• Registration of the brand (and) category(ies)• Regulations, Customs, Tax, licenses, • Free Trade Zones and exemptions• Communication
• Language• Packaging• Website• Social Media strategy, blogs, • Free publicity, magazines, news papers, local TV & Radio
CHECKL
IST
CHECKL
ISTDEVELOP AN INTERNATIONAL STRATEGY
OK OUTSTANDING
Understand value brand equity
Understand consumers
Provide integrated marketing skills
Innovation & creativity
COOPERATION/Collaboration
Return on investment
GOOD
WHERE ARE WE NOW? vs WHERE WE WILL BE IN 6 MONTH?
CHINA Market Scan provides knowledge and understanding of the following:China: the current business climate:- Industry Characteristics / Perspective - Consumer research:
consumer behavior / group needs - Competitive analysis - Distribution Channel Analysis, Relevance legal / political legislation– SWOT analyses
China market scan
The CHINA Market Scan and a thorough evaluation, delivers you know exactly what the market potential is of your business in China.
Conclusions Gain a clear understanding of the
Chinese law and government policies associated with foreign business activities
Find local partner(s) Establish comprehensive
contractual terms Conduct a trial project before
transferring critical work to any outsourcing partner
Periodically reassess the relationship and monitor stability of the political environment
Be Chinese (be patient!)
China & India likely to dominate the next decade in terms of providing low-cost labor and key technology skills
The challenge is to overcome language / cultural / IP concerns
Market opportunities will continue to grow
Recommendations
Links and industry contacts Food–related resources China Agriculture Science – www.caass.org.cn Government, business and trade resources for China China Customs – www.customs.gov.cn
China Ministry of Agriculture – www.agri.gov.cnChina Ministry of Commerce – http://english.mofcom.gov.cn
Media Beverage – www.beveragechina.org.cn
China Dairy Information – www.chinadairy.net Wine – www.winechina.com/EN
Further reading The China Vortex - chinavortex.com China Web 2.0 Review - cwrblog.net China Law Blog - chinalawblog.com China Economics -
http://www.indexmundi.com/china/economy_overview.html https://www.cia.gov/library/publications/the-world-factbook/
geos/ch.html
China Success Stories - chinasuccessstories.com All Roads Lead to China - allroadsleadtochina.com
同义词
Thanks for your attention and I wish that you can now make a
step forwards to reach your aims
HENK TEROLMobile: +31(0) 654 977 703
CHINAWorkshop for
entrepreneurs with export plans to China
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