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Nothing compares to China: NZ business wants its wealthy, large middle class to visit and shop

Business / news
Nothing compares to China: NZ business wants its wealthy, large middle class to visit and shop
A sale sign in China

McKinsey greater China managing partner Joe Ngai remarked earlier this year that "the next China is China" for foreign investors, suggesting its GDP growth potential pushes it above its rivals.

NZ China Council executive director Alistair Crozier likes the sentiment.

Against a global backdrop of economic uncertainty, inflation, and shaky supply-chains, New Zealand’s trade with China hasn’t faltered.

Crozier says trade with China topped $21 billion in 2022 for the first time. Imports also grew, reaching $18 billion in the same year, he says.

In April 2022 the two countries signed off on a free trade agreement upgrade, eliminating tariffs on 12 wood and paper products, meaning most wood and paper exports to China will be tariff-free. It also brought in a six-hour customs clearance time for perishable goods from New Zealand exporters.

Earlier export success came in January 2022 when most dairy products became entitled to duty-free access, shaving $200 million in tariffs.

The council is about to head to China, with former NZ ambassador to China and current council chair John McKinnon leading a delegation on a trip there in May.

Like many groups and businesses, the council hasn’t been to China for some time.

Its citizens had been placed under strict lockdowns under a tight zero-Covid policy, but Chinese leadership abandoned the policy in December.

People were shell-shocked by the length of the lockdowns, says Shanghai-based marketer Mark Tanner.

"So they didn't quite bounce back like they did after the initial lockdowns."

Tanner's business, China Skinny, specialises in research, marketing and strategy for those wishing to crack the alluringly large and well-heeled Chinese market. It's client list is chunky; Ikea, Fonterra, Nike, Adidas, Tourism Australia.

He says, being "100% transparent", the past few years have been much slower than 2019.

Tanner says now, it "feels like spring."

Forums and fairs

E-commerce giant Alibaba held a business forum in Auckland in late March, highlighting its Tmall and Tmall Global platforms.

The event was kind of a one-stop-shop for getting your product to China. Alibaba had booths set up to offer help for Kiwi business owners step-by-step onto its online platforms including data and analytics specialists, payments, or warehousing products in China.

Dairy giant Fonterra gave a presentation about its efforts in China, engaging influencers, or "key opinion leaders," to enthusiastically sell its dairy riches.

There were insights into eight strategic consumer segments on Tmall Global: rookie white collars, wealthy middle class, supermoms, the small town mature crowd, urban grey hairs, small town youth, urban blue collars and Gen Z.

Tmall hasn't had a great few years. Tanner says its traffic has been quite flat, and consumers have been moving away from it and fellow e-commerce heavyweight Its parent, Alibaba, recently announced it would break itself up, but would hold onto the Tmall part of the business.

Tmall had doubled its rates for users in the last few years, Tanner says. Factoring in commissions, or a cut to a middle man, it can mean some brands aren't making much at all.

There is now more focus on creative, targeted products and brands with their own channels, or Wechat groups, he says.

In the early 2010s you could throw a made in New Zealand sticker on and "everyone would love it". Now, cutting through in the hyper-competitive Chinese market is harder than its ever been, Tanner says.

Chinese consumers still hold NZ brands in high regard, he says. But you have to say more.

"Get up here," is his advice to NZ firms. "Its invaluable to see what people are doing."

Finally. Chinese people and firms are on the move again. There are hopes New Zealand businesses, and the economy, could and should capitalise. 

"The last three weeks, China is back on the map," Tanner says. "The economy is growing, unlike a lot of other markets."

Chinese GDP grew 4.5% in the first quarter of 2023, with retail sales leaping 10.6% and industrial output rising 3.9%.

You can try and diversify, and that's healthy, Tanner says. The key challenge is finding markets that can compare in scale and growth and opportunity to China.

"If you look at Tourism Australia, they've got a lot of a lot of Vietnamese visitors coming into Australia right now. They spend around a twelfth per day what Chinese visitors spend. And the size of the market, it's really tiny. The number that are travelling, the number who can afford to travel time is tiny compared to the pretty enormous middle class here in China. There's all this talk about ASEAN countries, but at the same time, it's still quite a quite a lot smaller."

There are now things for NZ businesses to do in China, with Chinese business fairs are back up and revving for the first time, Crozier says. 

The Canton Fair, China’s largest trade show, is on with an estimated 370,000 people attending on day one, about 65,000 of them foreigners. Local media reported visitors from the US were lacking, pointing to geopolitical tensions.

But there was increased visibility of buyers and businesses from the Association of Southeast Asian Nations (ASEAN).

“For decades this has been a fantastic opportunity for NZ businesses to go up [to China],” Crozier says.

After two years of little travel to or from China, and off the back of surprisingly strong Chinese retail and GDP data, there is a genuine feeling of optimism, Crozier says.

Look! A plane

A China Market Update from New Zealand Foreign Affairs and Trade's Consulate-General in Shanghai said travel between New Zealand and China was picking up again following China’s borders reopening, and visa processing on both sides was ramping up.

It said companies were opening new offices in Shanghai, and looking to take clients and influencers to New Zealand.

Tanner says China Skinny hasn't had much much interest yet from New Zealand businesses, and in contrast to the grumbles of stall-holders at the Canton Fair, Tanner says northern hemisphere firms are active.

The Aussies are also busy, he says.

"We do a lot with the Aussies and their government representative. They're definitely more chipper than I've seen in a long time, Beijing is finally taking their calls. And we had a first inquiry from an Australian wine brand the other day, the first one in a long time. So there is that positive stuff, but the same time most of our inquiries are still coming from the Northern hemisphere at the moment."

Airline media reported flagship carrier Air China would start flying four times per week from Beijing to Auckland from May 2.

It will be the first time the airline has flown into New Zealand since the Covid-19 outbreak in 2020.

Arrivals from China totalled more than 400,000 in 2019. But February 2020 saw flights from China suspended after the New Zealand government put in border restrictions barring foreign travellers that came from, or had transited through, China.

In 2020 about 58,000 Chinese travellers visited New Zealand, before that number dwindled to under 2000 in 2021.

Air China isn’t the only airline ramping up flights between the two countries, although it is the only airline operating on the Beijing route. 

In early March China Southern landed the first Chinese tour group flight in Auckland. It, along with China Southern, China Eastern and Air New Zealand, had increased flights from 11 a week to 19 per week at the end of March, Auckland Airport's chief customer officer Scott Tasker said in early March.

He said another three services would be added in early May, including Air New Zealand increasing flights from Auckland to Shanghai to seven per week by May 1.

New Zealand is among 20 outbound travel destinations to restart group tours under the China Approved Destination Status scheme.

“There is an increase in air connectivity. Flights between Auckland and China were on life support, but more airlines are going to return to daily services which is very positive. We have started to hear students are starting to return,” Crozier says.

Treasury's April fortnightly economic update said inclusion in this scheme will mean a sooner-than-expected return of high-spending Chinese tourists, who in 2019 accounted for 15% of total visitor spending.

Treasury said visitor arrivals had so far bucked its soft predictions for 2023, with a strong recovery since the Half Year Economic and Fiscal Update released in December.

It said visitor arrivals had reached around two-thirds of 2019 levels, “underpinned by pent-up demand and easing supply constraints in the airline industry.”

Tourism NZ chief executive René de Monchy says the reopening and recovery of New Zealand's second-most valuable visitor market is great news.

"What we're starting to see, which is also really positive, is that airline capacity is starting to increase again. We're expecting by the end of this month that, based on the forecasts from the airlines themselves, that airline connectivity will be back at about 55% of what it was 2019."

More flights mean more people, and more "cargo in the belly" of the planes, he says.

He says the industry expects Chinese visitor returns to be gradual and measured, with friends and relatives among the first and most motivated to visit, while those without personal connections might chose to travel closer to home "and then venture further afield".

A Fitch Solutions Asia Pacific review this month agreed, with its analysts suggesting South Korea, Thailand, Japan and Vietnam will be among the largest tourism beneficiaries of China's reopening. 

Travelling is also more expensive than it was, which will hold back some travellers.

De Monchy is looking ahead to Chinese New Year in January 2024 when there is often a boost in travel.

In the meantime, Tourism NZ is "keeping people dreaming", and doing targeted marketing to Chinese travellers.

"As soon as the [border reopening] announcement was made, we launched and accelerated the latest iteration of our 100% Pure New Zealand campaign, which is called 'If you seek'. That's encouraging people what we call through the funnel, to start planning and actually booking their travel."

The agency is pushing Chinese travellers to link up with in-bound travel agents and intermediaries, and is also planning business-to-business events to get tourism industry people and operators from New Zealand to into the market, reconnecting with Chinese travel buyers.

De Monchy hopes to get to China in the next few months. 

"Tourism was our number one export in pre-Covid and was effectively zeroed out. We're at about half of what we were. So there's a really important phase for us in tourism growth to be able to create a buffer for those tougher economic times. That's certainly a real focus for us."

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Lock our door and throw away their key. We don't need any more 'communist' infiltration of our way of life.


The lock and key were both made in China so they are probably easily replaced.


Chinese e-commerce giant Alibaba Group Holding has established a new budget section on its flagship digital retail platform Taobao, as competition with online shopping rivals and Pinduoduo heats up amid a consumption-led economic recovery in the country.

The section named 99 Temai, which translates to “99 special sale”, has initially been made available to select users on the main page of Taobao, China’s biggest online retail marketplace, according to a report on Monday by The Paper, a Chinese digital newspaper owned by state-run Shanghai United Media Group.

What is happening here is that e-commerce in China is moving towards a 'discounter' offer and price wars between online retailers. That means that the shopper is looking for bargains. This is potentially quite a negative indicator and is similar to what happened in Japan after the bursting of the bubble.… 


Where is Jack Ma????


The new Washington consensus

Yesterday’s US economic orthodoxy is today’s heresy


I suppose neither this woke government of a national government wants to upset its chinese masters.

Just another reason to move to ozzy


Too late, they're already there in their thousands.

If you're talking about South East Asia, NZ is about as far south & as far east as you can get. We are not only SE Asia, we are South East World.