25 September 2017
Karen Campbell / Trade Commissioner NZTE / Thailand
New Zealand Trade Commissioner to Thailand, Karen Campbell, explains the opportunities for Kiwi exporters as Thailand returns to business as usual after mourning the passing of its King.
For many Thai people, the loss of King Bhumibol Adulyadej late last year was akin to losing a father. The country plunged into an extended period of mourning for the world’s longest serving monarch, who died after 70 years on the throne.
Bhumibol was a daily presence in the life of Thais. His official portrait hangs in almost every restaurant, house and office. His death brought the country to a standstill, and with this came a marked slowdown in consumer spending, which was inevitably felt by some of our Kiwi exporters.
But there are signs this mourning period is coming to an end as Thai people gradually add back colour to their wardrobes, they are also returning to their usual spending habits.
Reinvigorating consumer spending appears to be at the forefront of the Thai government’s agenda, as it makes changes aimed at stimulating products and services across its economy Thailand’s GDP grew by 3.2 percent in 2016, marginally higher than the 2015 rate of 2.9 percent.
As well as travel incentives to boost Thailand’s tourism sector, which last year boasted a record-breaking 32 million visitors, the Thai government has laid out ambitious plans to become an ASEAN (Association of South East Asian Nations) hub. It has also introduced special investment incentives for Thai and foreign businesses starting up or undertaking new qualifying investments, including those in digital development and food technology.
Despite an unsettling few months, New Zealand exporters are in a good position to benefit from the Thai government’s stimulus and the expected pickup in consumer demand.
In the food and beverage sector, our apple, avocado, persimmon, seafood and wine exports have grown strongly since 2005 when the New Zealand - Thailand Closer Economic Partnership Agreement (CEP) was established. Among its benefits are reduced tariffs on almost all of New Zealand’s exports, and more relaxed rules around short-term business travel to Thailand.
In that time, New Zealand apples have chomped up a huge chunk of the market, with exports rising by more than 30 percent each year. This success is helped by companies such as T&G Global, The Yummy Fruit Company and Heartland Fruit offering a good consistent product, strong sampling programmes and market support.
T&G Global also recently opened an office in Bangkok to provide better support for its in-market customers. T&G Global’s Regional Manager for South East Asia, Victor Anderson, says Thailand is exceeding expectations in volume for the company’s JAZZ and Envy apples, as well as table grapes. T&G Global’s memorandum of understanding with Zespri to sell their fruit in Thailand (as well as in Cambodia, Myanmar and Laos) is also enabling growth. Following the death of King Bhumibol Adulyadej, T&G Global had put its sales promotions on hold, but it has now resumed activity.
New Zealand has another trade agreement with Thailand, the ASEAN Australia New Zealand Free Trade Agreement, which will eliminate tariffs on the majority of New Zealand exports to ASEAN markets by 2020, and provide a raft of other benefits for companies looking to enter the region.
Such agreements are bearing fruit. New Zealand’s total exports to Thailand were $350 million in 2005, and last year exports reached well over $800 million. Our bilateral trade relationship with Thailand is now our seventh largest.
On the ground in Thailand, New Zealand’s exports are also being promoted at trade shows. Kiwi exporters introduced more than 100 leading Thai hospitality professionals to their products at Food Connection, a New Zealand Trade and Enterprise-supported event held in Phuket earlier this year.
One of the highlights out of this event is that eight Thai restaurants agreed to run New Zealand food promotions this year, which gave Thai chefs and their diners an opportunity to experience New Zealand products first-hand.
There’s no doubt that for New Zealand companies, export success in Thailand relies on collaboration. On the world stage, New Zealand companies are often small in relation to others and without scale it is often hard to grow. By joining forces, New Zealand companies gain scale, and help each other to grow much more quickly.
As a Trade Commissioner responsible for helping New Zealand companies grow in international markets, I meet Kiwi firms at all stages - from those in the early stage of exporting to those who have been in the game for years.
Although each company is different, they all face the same challenge: to allocate enough time and money to support the brands they are selling into markets. It’s one thing to export a pallet of wine – totally another to be running tastings, Facebook engagement, quality control and building relationships in the market.
When looking at exporting to Thailand, take time to carefully select distribution partners who will get your products into the market, and who will provide knowledge and connections with your consumers.
Thailand is open for business to New Zealand companies who are ready to commit to the market and partner with savvy operators.