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China the sleeping giant

CK IMPORT EXPORT CO (NZ) LTD. China the sleeping giant. The Market The Future NZ’s role in China’s future OR China’s role in NZ future. CK IMPORT EXPORT CO (NZ) LTD. China – 1.3 billion potential customers. Chinese priorities Earning money Personal Health Family.

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China the sleeping giant

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  1. CK IMPORT EXPORT CO (NZ) LTD China the sleeping giant The Market The Future NZ’s role in China’s future OR China’s role in NZ future

  2. CK IMPORT EXPORT CO (NZ) LTD China – 1.3 billion potential customers Chinese priorities Earning money Personal Health Family Velvet is seen as an adult medicine, food or HFF

  3. CK IMPORT EXPORT CO (NZ) LTD China– where does our velvet go? • South Korea consumes 62% of all NZ Velvet but directly imports only 27% of NZ Velvet. • The remaining 35% is imported via China • 68% of all NZ velvet is exported to China • Exported in via Dalian or Hong Kong • Hong Kong was the gateway to China (smuggling), now Dalian with the free trade agreement. • From Dalian port – 6hr road trip to Xifeng for processing & distributing throughout China. • In China – 8 key consumption areas for velvet areas. • Mainly East Coast – population.

  4. CK IMPORT EXPORT CO (NZ) LTD The Market –NZ Exports 68% exported to China/ Hong Kong in 2012 $ Sales – NZ Velvet Exports KG Sales – NZ Velvet Exports Year ending 30th Sept Year ending 30th Sept • South Korea consumes 62% of all NZ Velvet but imports only 27% of NZ Velvet. • 35% is imported into South Korea via China. Source: DINZ 2013

  5. CK IMPORT EXPORT CO (NZ) LTD Farm Price Vs Kg’s Exported. Total Tonnes exported per year Average Farm price per Kg Year ending 30th Sept Source: DINZ 2013

  6. CK IMPORT EXPORT CO (NZ) LTD Farm Price Vs Currency. Average currency January each year Average Farm price per Kg Year ending 30th Sept

  7. CK IMPORT EXPORT CO (NZ) LTD The Market – how is our velvet used by the consumer • Broken into 3 groups • Traditional – raw state put into food • Oriental – used by oriental medical doctors • Healthy Functional Food (HFF) South Korea China Estimate only

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  11. CK IMPORT EXPORT CO (NZ) LTD Approx. 25 – 30% of HFF velvet sales used in drinks The FutureHealthy Functional Foods (HFF) • Was predicted to reach US$12billion sales in China by 2010 – Food Manufacture Magazine 2007 • HFF are products ready for consumption purchased over the counter • Examples - • capsules, drinks, health bars etc. for busy westernised lifestyles • Alcohol products containing velvet (egwine or spirits with velvet fermented), tonics. • Ingredient in a finished product – eg chewing gum, probiotic yoghurt

  12. CK IMPORT EXPORT CO (NZ) LTD Barriers to HFF Market • Barriers to HFF Market: • Chinese govt only allows Malu velvet to be used. Need recognition of NZ Red Deer. • Terms of Trade – Need NZ Red Deer recognised as suitable ingredient in HFF • We need to be in this market for Velvet exports to continue. • legal access for NZ velvet in raw state for use in HFF ingredient • NZ branded products sold in China – 2 year process and costly

  13. CK IMPORT EXPORT CO (NZ) LTD What is HFF to the future of NZ exports to China • China is becoming more westernised. • The traditional and oriental market is mature. • The future is healthy functional foods (HFF) • First capsules • Then drinks – tonics & wine • Missing out on a US12billion + market • Challenges: • legal access for NZ velvet in raw state for use in HFF ingredient • NZ branded products sold in China – 2 year process and costly

  14. CK IMPORT EXPORT CO (NZ) LTD Influencers to exporting to China: • Central Govt/ The Premier: • Influence consumer behaviour – eg Wine sales decreasing as new premier enforced Chinese govt officials need to reduce alcohol consumption. • Can dictate alter trading terms although it is free terms of trade. • Currency – strength of NZD to USD • Stock Piles of velvet

  15. CK IMPORT EXPORT CO (NZ) LTD What the Chinese like!

  16. CK IMPORT EXPORT CO (NZ) LTD NZ velvet to China • Currently two ways • 1. Via an Exporter • Pros • increased stability • pays GIB • promote NZ velvet • Cons • ???? • 2. Sold direct to Chinese buyer • Pros – • the farmer gets paid immediately for their velvet for this season • Cons – • Future seasons the value of velvet could decline and Chinese buyers are few and they TALK! Supply and Demand. • Don’t pay GIB that markets and promotes the end product • Consistency in price & demand for the future

  17. CK IMPORT EXPORT CO (NZ) LTD Thank – youQuestions at the end of the sessionWould like to introduce -Pei from Vitaco

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