Ir­ish ex­porters look east for grow­ing mar­ket in qual­ity goods

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE - Sarah Con­nelly

IR­ISH com­pa­nies should look east to find a ris­ing mar­ket­place for qual­ity goods and ser­vices.

In­creased mid­dle-class in­come has trans­formed dy­nam­ics in the Chi­nese mar­ket. Un­til re­cently, com­pet­ing on price was a se­ri­ous bar­rier for ex­porters tar­get­ing China, but a shift in con­sumer pref­er­ences has ex­panded op­por­tu­ni­ties for over­seas busi­nesses.

With the re­view and com­ment sec­tions of e-com­merce web­sites in­creas­ingly in­flu­enc­ing pur­chas­ing de­ci­sions, price is no longer the con­sumer’s main pri­or­ity; prod­uct qual­ity has be­come al­most as im­por­tant. This has cre­ated op­por­tu­ni­ties for Ir­ish ex­porters to in­vest in e-com­merce and serve a grow­ing taste for qual­ity goods.

Ir­ish com­pa­nies and brands al­ready have the ad­van­tage of be­ing per­ceived by Chi­nese con­sumers as sup­ply­ing pre­mium prod­ucts and ser­vices as­so­ci­ated with a high level of qual­ity. One such ex­porter, Fe­lim Meade, MD of Emer­ald Green Baby, de­scribes the com­mer­cial land­scape that at­tracted his com­pany to the re­gion: “Ev­ery­one knows the Chi­nese mar­ket has huge po­ten­tial. With the gov­ern­ment’s five-year plan for 6.5pc an­nual growth and its ‘Belt and Road’ ini­tia­tive driv­ing con­nec­tiv­ity be­tween Eurasian coun­tries, the op­por­tu­ni­ties for growth are end­less.

“The chal­lenge lies in ac­cess­ing China’s po­ten­tial in a cost-ef­fec­tive way. Emer­ald Green Baby has been sell­ing in China for three years but spent years re­search­ing how to sell there. China is a very so­phis­ti­cated and dy­namic mar­ket, far more ad­vanced than we are used to in Europe and Amer­ica. The po­ten­tial for e-com­merce is clear: in China 51pc of goods are bought on­line and 80pc of on­line sales are done by mo­bile phone.”

China is the world’s top on­line shop­ping mar­ket, ac­count­ing for over 40pc of global e-com­merce re­tail sales. Two of China’s big­gest e-com­merce play­ers played a ma­jor part in that growth. In 2016, Alibaba’s profit al­most dou­bled to $2.1bn and Ten­cent’s grew 70pc to $2.7bn.

Wechat agency Walk­thechat ex­pects the cross-bor­der e-com­merce mar­ket to reach a 7.5 tril­lion RMB vol­ume (€1 tril­lion) in 2017, demon­strat­ing how ap­peal­ing for­eign brands are to lo­cal con­sumers. This year, the Chi­nese gov­ern­ment an­nounced it plans to es­tab­lish more cross-bor­der e-com­merce pi­lot zones to sup­port in­ter­na­tional com­pa­nies’ at­tempts to gain ac­cess to the Chi­nese mar­ket. While China’s reg­u­la­tory en­vi­ron­ment can still pose a chal­lenge to cross-bor­der op­por­tu­ni­ties, th­ese pi­lots are an ex­am­ple of how the sit­u­a­tion has re­laxed in re­cent years.

En­ter­prise Ire­land has in­creased sup­port to en­cour­age more com­pa­nies to cap­i­talise on the op­por­tu­ni­ties pre­sented by the Chi­nese e-com­merce mar­ket in 2018.

Sev­eral En­ter­prise Ire­land client com­pa­nies, in­clud­ing Emer­ald Green Baby, Ovelle, Ir­ish Breeze and Cl­e­va­mama, al­ready sell on e-com­merce plat­forms in China.

Ir­ish com­pa­nies con­sid­er­ing China are en­cour­aged to con­duct dili­gent mar­ket re­search and visit the re­gion to en­sure they un­der­stand con­sumer pref­er­ences in their sec­tor be­fore com­mit­ting to a plan.

Mar­ket re­search will also help com­pa­nies to de­ter­mine which e-com­merce plat­form best suits their of­fer­ing. Some lo­cal plat­forms are not well known out­side China, but they are no less im­por­tant within the mar­ket it­self. En­ter­prise Ire­land’s Mar­ket Re­search Cen­tre will help com­pa­nies con­sid­er­ing e-com­merce ex­pan­sion to China.

When vis­it­ing the re­gion, Ir­ish com­pa­nies should aim to meet po­ten­tial part­ners and dis­trib­u­tors to get a prac­ti­cal sense of the mar­ket and ex­plore de­mand for their prod­ucts or ser­vices. Re­la­tion­ship building is es­sen­tial to do­ing busi­ness in China and of­ten must be done face-to-face. Many busi­nesses credit in­ter­per­sonal re­la­tion­ships as key to suc­cess­ful busi­ness in China. It is a re­minder that, in some mar­kets, per­sonal con­nec­tions and rec­om­men­da­tions out­weigh sim­pler con­sid­er­a­tions — like price.

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