Satisfying Asia’s appetite
TO tap into the fast evolving markets of Asia, food manufacturers need to tread the market with thorough understanding of the Asian way of doing business.
A focus on cost, quality and speed of delivery will always reap tangible results.
First-impressions do matter to establish good business relations with the potential Asian clients.
The possible areas to take note could be negotiating styles, eye for detail, punctuality etc.
Both business and customary etiquettes prove beneficial in cultivating relationships. In spite of the modernization, cross-cultural issues have a good role to play and have changed the way of doing business.
Clean and green
Australia’s ‘clean and green’ food image has been the joint effort of the government and its food manufacturers.
While the food suppliers of other competing countries vie for a bigger stake, Australian manufacturers should stay abreast of their counterparts in all aspects of the food supply chain, starting from market knowledge, industry trends and technology to the correct know-how of capturing the pulse of the Asian buyers and consumers.
While trade barriers are being removed in economies as diverse as Cambodia, China and Vietnam, new opportunities arise for market entrants who have never exported before.
The Asian way of business has its own challenges but offers greater opportunities for players who are committed and have a long-term goal in Asia.
Sizing the market
With the change in outlook of the Asian consumer, the food product-line requires constant improvement.
In recent times, western food concept has seen increase in both value and volume.
“The eating habits of the people in the Philippines is highly westernised but at the same time they are very health-conscious. Exporters of healthy and natural food and beverages are well rewarded in the market,” Mel Nicolas chief of the import monitoring division at the Bureau of Import Services (BIS) in Manila said.
“Middle to low income groups provide plenty of opportunity for exporters. The initial point of contact could be the markets retailers and grocery associations. They should price their products sensibly in order to establish themselves as a preferred supplier”.
The key to survival and flourishing in Asia depends on localizing the product offerings and complying with the local food laws.
“Singapore imports over 3500 types of processed food carrying more than 17,600 different brands,” Agri-Food and Veterinary Authority (AVA) of Singapore senior corporate communications officer Lai Tzi Yuan told FOOD Magazine.
“The major supply of our imported food comes from (apart from the Asian neighbours) USA, Netherlands and then Australia, followed by New Zealand and Brazil.
“Australian exporters could liaise with AVA registered traders for processed food imports into Singapore. All food imported must comply with the Singapore food laws.”
But, getting licenses could be a complicated and time consuming issue, especially in Indonesia and China, according to Austrade Indonesia business development manager Pingkan Mokalu.
“It could take up to six to 12 months to get food licenses in Indonesia. Foreign exporters should consider ‘time’ as an important consideration and should not seek fast track solutions.”
“Exporters have to be attentive to the local market requirements and issues such as local taste, price and hygiene too,” Pingkan reiterated.
“After sales service helps establish brand image and builds trust. Further, import regulations and trade restriction should be closely monitored and complied with.”
Guide for exporters
To fully venture into doing business, one must understand the degree of change that has taken place recently in Asia’s social, political and economic spheres.
That will make doing business the Asian way less formidable.
Perception of Australian processed food, as having good quality must be constantly reinforced.
Food manufacturers should adopt a mass-market strategy.
Targeting large-scale exports of traditional and high demand items are vital to penetrate international markets.
Product suitability, feasibility of operation and impact of trade rules and regulations should be carefully studied. It is impossible that any food exporter can neglect the two Asian giants, India and China, if they are looking for a considerable share of the Asian processed food market.
Uniqueness of these markets poses a challenge. For example, China’s fragmented yet tightly controlled market could be daunting for a new entrant.
The Asian processed food industry is at the helm of a major expansion, both in its exports and import requirements.
Along with skilful business and financial acumen, sensitivity to culture and customs are pre-requisites for most Asian businesses.
In Singapore & Japan, the western exporters should expect to give more attention to the time of delivery, labelling issues and the quality of the product, where as, in China having the right connection or ‘quanxi’ is critical.
Indonesia is strict on labelling
Indonesia Food Labelling Regulations require that the producer or importer is obliged to label “Halal” (Lawful) on food products that is permitted for consumption by Muslims and is also responsible for the correctness of these statements.
Knowledge about numbers and packaging for Asians, which includes dragons in a red and golden colour wrapping, may sound a little queer to the western exporter but that’s the appeal for the Asian Chinese and could help boost sales by this mere change in colour and logo.
For example, it is best to avoid using triangular shapes in Hong Kong, Korea, or Taiwan, where the triangle is considered a negative shape.
Many imported food items are new and first time introductions to the local scenario.
Thus, promotional campaigns and customer preferences must be taken into account while formulating an entry strategy.
In Korea, one should be well prepared to face the problem of “product nationalism”, where the domestic product loyalty is still strong.
Howdy partner
Daniel Lim, owner and manager of a boutique wine shop ‘Cellar Deluxe’ told FOOD magazine that from a shop having only 30% of his wines from Australia in 1998, he has migrated to having nearly 85% this year.
The reason for shift to Australian wines is due to the demand, ease of buying, geographic proximity and value for money.
His preference is to deal with vineyards directly, and merchants if necessary, for more labels than the vineyards can supply.
“Two and a half years back there were around 700 wine importers in Singapore, which includes whole sellers, restaurants, supermarkets and boutique shops etc. Now, there are far-too-many!” Lim said.
One of the best ways for Australian food and beverage manufacturers to showcase their products is through trade forums and exhibitions. These serve as an international one-stop marketplace for both buyers and sellers.
In Singapore, the largest exhibition of food & beverage products and equipments in Asia happens every two years at Food&HotelAsia.
“This is the biggest food and hospitality event in Asia. Statistics from the last exhibition in 2004 showed that a record number of over 37,000 trade visitors gathered for this exhibition,” Singapore Exhibition Services Public Relations Executive Pamela Chua said.
The Food&HotelAsia2004 provided an international marketplace for food and hospitality stakeholders throughout Asia.
“Data from 2004 showed that of the five pavilions set up for Australian manufacturers, there were 253 exhibiting companies and 710 exhibitors from Australia, for bulk buy of products, which includes food technology, equipments and wine,” Chua added.
Speaking on his participation at Wine&SpiritsAsia2004, Bernard Forey, Chairman of Richfield Vineyard in Australia said the Internet was a good way to connect business worldwide.
“Listing the company and product type in e-marketplace business export directories, can prove to be a smart way of doing business in the digital age,” Forey said.
The International Business Opportunities (IBO) from IE Singapore, a free online service, serves as a matching tool for Singapore-based companies looking for foreign business partners and for foreign companies seeking business in Singapore.
The next Asia Export report will appear in the September issue.
21-Jun-2005