The report, Successful business models for New Zealand companies in China, was prepared by Deloitte and includes case studies of companies such as Rakon, ADInstruments, Carrick Wines and BioVittoria.
The key challenges for New Zealand businesses identified by the report include:
- The fact that China is not one market, but a multiplicity of markets.
- New Zealand businesses are often microscopically small in the context of the overall market opportunity presented by China.
- Kiwi businesses’ over reliance on serendipity.
- The need to move away from the Kiwi ‘she’ll be right’ and ‘I am happy with a small slice’ attitude.
A key theme of the report is the need for focus. SMEs need to focus on a specific market, be it geographic, demographic or a combination of both, in light of China’s vast size.
In tandem with the need for focus, the report also identified getting the market access strategy right as an overwhelmingly important factor for success in China.
The key lessons of the report include:
- Friends in the market – relationships developed should transcend normal business relationships and be treated as real friendships.
- Opportunity – New Zealand has a privileged access and standing in one of the most important economies in the world. SMEs need to better understand and quantify this opportunity.
- Cultural understanding – SMEs need to have a much better understanding of the culture of China, or at the very least, the culture of the subset of the overall market that they are targeting.
- Understanding of the market – The need to develop a clear view of the competition, the demand, the requirements, the history or background to the requirements of the market.
- Scope and limitations awareness – SMEs need to understand the scope of their business, and the inherent limitations that this imposes.
Download the full report for more detailed analysis on how to succeed as a New Zealand SME in China.
