I recently read a fantastic article by Jeff Wells for fooddive.com titled Retail detour: How brands large and small are going beyond retail shelves to sell to consumers, in which he discusses some new and creative methods that food and beverage producers are increasingly employing to sell their goods directly to customers.
As Wells highlights, where a brand seeks to expand into new markets, “this traditionally would mean a push into grocery chains, specialty stores and other retail locations” and “paying numerous middlemen to deliver products to retailers” through the supply chains that are fraught with risk, interruptions and unexpected costs and other surprises. Wells explains how working within this traditional approach, brands often find themselves “frustrated by things like slow sales, space restrictions, poor handling and a high bar to access”, challenges which are amplified when operating in international markets. Increasingly though, “companies of all sizes are coming to the same realization… maybe retailers aren’t necessary after all”.
I attend many business events internationally where I rub shoulders with numerous producers and I’ve noticed that there are two topics that regularly arise in discussions, firstly, how to overcome the challenges of the traditional supply chain/retailer approach and secondly, how to succeed in China.
Producers are very familiar with the statistics and stories which demonstrate how large the potential market is for their goods in China, yet I’ve talked with many who are yet to capitalise on the opportunities that exist. Producers have told me how they “got burned in China”; how they’ve spent vast amounts of money and time on applying the traditional market entry approaches of attending trade shows and missions, engaging consultants, seeking partnerships, building relationships, making multiple visits to the country and producing promotional materials in Chinese languages. I’ve heard some real horror stories of failed partnerships, supply chain disruptions, costly scams and things generally not going to plan. For many companies, and particularly small ones, selling in China is considered too expensive, too risky and too time-consuming to bother with.
Because I’m passionate about seeing Australian producers succeeding in Asia and Aussie products being enjoyed by people the world over, I’m excited to announce that League Cultural Diplomacy is supporting Luckypole Ltd in an exciting new initiative which is designed to reduce the pain for Australian producers seeking to enter the Chinese market for the first time, or those that have struggled to achieve their aims within China previously and want to make a fresh attempt.
Luckypole is a Hong Kong based Australian managed product sourcing company, and having operated in China since 1987 they understand the market and its complexities and the most appropriate approaches for Australian companies to apply when selling in China.
The approaches that Luckypole employs are designed to get produce into the hands of Chinese mainland and Hong Kong residents and selling direct to consumers is at the heart of their strategies. Their sales channels include tasting events, retailer visits, party-plan activities (eg: the Tupperware approach), online methods including Chinese social media strategies and activities designed to sell goods to the hundreds-of-thousands of day-visitors from mainland China who travel to Hong Kong each day to purchase tax-free goods which are either unavailable on the mainland or are much more expensive. Future plans include a ‘one-stop shop’ in Hong Kong to sell Aussie products which targets the day visitors from the mainland. There are many advantages to selling to Chinese buyers through Hong Kong, including reduced taxes and increased efficiencies in regards to legal compliance issues. These methods are effective because they remove the cost and risks of dealing with middle-men, vulnerable supply chains, demanding retailers and scammers.
This new initiative allows producers to tap into Luckypole’s in-depth local knowledge and networks, and because Luckypole has built outstanding regional relationships over the last thirty years, their strategies remove or reduce the initial needs for producers to make expensive trips to China, take time consuming “How to do business in China” courses and get involved with complex Chinese language social media sites. Luckypole is paving these paths and can bring producers into their growing networks to re-enforce effective sales channels. Once a producer has established a foothold through these initial low-cost, low-risk methods, Luckypole can subsequently assist exporters to scale up their sales in China.
Australia is famed for the quality and all-round deliciousness of it’s produce which deserves to be enjoyed all around the world!
To find out more contact Brian Mallyon at Luckypole ( email: email@example.com ), and if you need help with events, relationships or any cultural aspects of doing business abroad, be sure to contact us at League Cultural Diplomacy.