Exporting to China requires patience, long-term commitment, understanding of culture and regulations, and excellent customer service. Carole Goldsmith speaks with two companies with successful track records.
Xtralis
MELBOURNE manufacturer and exporter of intelligent fire detection and security solutions, Xtralis provided smoke detection systems across Beijing, for the recent Olympic Games.
The company’s director of sales, fire and security (Asia Pacific), Rob Galic told Manufacturers’ Monthly that the company’s VESDA smoke detection system, enabled the Olympic organisers to detect potential fire threats well in advance.
Galic explained how the company was awarded the project:
“When the Chinese Government decides to develop infrastructure, often design institutes are responsible for the building design and fit-out.
“In conjunction with our partners and Xtralis staff in China, we promoted the benefits of our technology to the key design institutes supporting the Olympics infrastructure development, along with the local fire bureaus that specified the safety standards.
“Obviously, being chosen for many of the key infrastructure projects which directly supported the Beijing Olympics games is a tremendous reference. This gives us significant exposure to further build our business in China,” he said proudly.
“Xtralis has actively targeted China since 1989. Austrade was instrumental in researching the China market and introducing us to key partners within our target fire market,” Galic added.
The company now has ten local staff in China who support a distribution network across the country. As well as its Melbourne manufacturing global headquarters, that exports 90% of its product, Xtralis has manufacturing operations in Belgium and Switzerland.
AuNew Group
Entering the Chinese market with the many regulations, registrations, cultural and language differences could be difficult for some small to medium (S2M) manufacturers, trying to tackle it alone. The AuNew Group assists Australian and NZ S2M manufacturers to export and display their products to high-end Chinese consumers and distributors in China.
AuNew Group Holdings is a multi-national company with two factories manufacturing Nutraceuticals and Cosmeceuticals, respectively in Sydney and Auckland, with branches in Hong Kong and Beijing.
The contract-manufacturing arm of the company’s business, GMP Pharmaceuticals, has Australian sales approaching $12m with approximately 50% exported primarily to China.
Group managing director AuNew Group Holdings, Karl Ye said, “Australian and New Zealand made products have a very clean image in China. Our AuNew Hub’s first flagship store that opened this May presents high quality Australian and New Zealand made products to Chinese high-end consumers and distributors. Our target is to have over 100 such stores throughout China.”
AuNew Hub’s three-storey flagship store is in the busy Jianwai SOHO Complex in central Beijing and just across the road from the landmark complex buildings of GUOMAO-World Trade Centre. The store primarily concentrates on Nutraceuticals, Cosmeceuticals, foods and beverages plus Aboriginal art and crafts.
Tips on doing business
According to Galic, when doing business in China, “…as with any region, you must have a clear strategy and a solid understanding of your position against local competitors, pricing, and preferred route to market.”
“Develop a plan to obtain adequate coverage and exposure for your product and remember that China is a large country. This means establishing local partners by province or national partners. You need to identify partners with the commitment, motivation, experience and market knowledge to sell your product.”
He also said that “on the ground” in China, Australian companies may find that meetings take much longer than they are accustomed as the Chinese like to establish a personal relationship.
Ye advised that doing business with China now requires more measures than Guanxi or relationship building. “As with selling to any other developed countries, product quality, competitive prices and after-sale services are key elements in business success in China.”
“While China is an increasingly lucrative market for high quality imported products, there are many uncertain issues like regulations that would prevent easy access to the market for Australian and New Zealand S2M companies, hence the establishment of AuNew Hub in Beijing.”
AuNew Group has also designed and put into use anti-counterfeiting labels to protect imported products.
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