Export Markets: Satisfying Asia’s Appetite

To tap into the fast evolving markets of Asia, food manufacturers need to treat the market with a thorough understanding of the Asian way of doing business. A focus on cost, quality and speed of delivery will also always reap tangible results. First-impressions do matter to establish good business relations with the potential Asian clients. So possible areas to take note would be negotiating styles, eye for detail, punctuality, etc.

Both business and customary etiquettes are important in cultivating relationships. In spite of the modernization, crosscultural issues have a significant role to play and impact the way of doing business.

Clean and green

While the food suppliers of other competing countries vie for a bigger stake, manufacturers should stay abreast of their counterparts in all aspects of the food supply chain, starting from market knowledge, to industry trends and technology, to the correct know-how of capturing the pulse of the Asian buyers and consumers.

As trade barriers are being removed in economies as diverse as Cambodia, China and Vietnam, new opportunities arise for market entrants who have never exported before. The Asian way of business has its own challenges but offers greater opportunities for players who are committed and have a long-term goal in Asia.

Sizing the market

With the change in outlook of the Asian consumer, the food productline requires constant improvement. In recent times, the Western food concept has seen an increase in both value and volume. “The eating habits of the people in the Philippines are highly Westernized but at the same time they are very health-conscious. Exporters of healthy and natural food and beverages are well rewarded in the market,” says Mel Nicolas chief of the import monitoring division at the Bureau of Import Services (BIS) in Manila.

“Middle to low income groups provide plenty of opportunity for exporters. The initial point of contact could be the markets retailers and grocery associations. Manufacturers should price their products sensibly in order to establish themselves as a preferred supplier”. The key to survival and flourishing in Asia depends on localizing the product offerings and complying with the local food laws. “Singapore imports over 3500 types of processed food carrying more than 17,600 different brands,” reports Lai Tzi Yuan, senior corporate communications officer Agri-Food and Veterinary Authority (AVA) of Singapore. “The major supply of our imported food comes from (aside from the Asian neighbors) USA, Netherlands and then Australia, followed by New Zealand and Brazil. Exporters could liaise with AVA registered traders for processed food imports into Singapore. All food imported must comply with the Singapore food laws.” But, getting licenses can be a complicated and time consuming issue, especially in Indonesia and China, according to Pingkan Mokalu, business development manager, Austrade Indonesia. “It could take up to six to 12 months to get food licenses in Indonesia. Foreign exporters should consider ‘time’ as an important consideration and should not seek fast track solutions.” “Exporters have to be attentive to the local market requirements and issues such as local taste, price and hygiene too,” Pingkan reiterates. “After sales, service helps establish brand image and builds trust. Further, import regulations and trade restriction should be closely monitored and complied with.” Guide for exporters To fully venture into doing business, one must understand the degree of change that has taken place recently in Asia’s social, political and economic spheres. Food manufacturers should adopt a mass-market strategy. Targeting large-scale exports of traditional and high demand items are vital to penetrate international markets. Product suitability, feasibility of operation and impact of trade rules and regulations should be carefully studied. It is impossible that any food exporter can neglect the two Asian giants, India and China, if they are looking for a considerable share of the Asian processed food market. Uniqueness of these markets poses a challenge. For example, China’s fragmented yet tightly controlled market could be daunting for a new entrant. The Asian processed food industry is at the helm of a major expansion, both in its exports and import requirements. Along with skillful business and financial acumen, sensitivity to culture and customs are prerequisites for most Asian businesses. In Singapore & Japan, the Western exporters should expect to give more attention to the time of delivery, labeling issues and the quality of the product; whereas in China, having the right connection or ‘quanxi’ is critical. Indonesia is strict on labeling Indonesia Food Labeling Regulations require that the producer or importer is obliged to label “Halal” (Lawful) on food products that is permitted for consumption by Muslims and is also responsible for the correctness of these statements. Knowledge about numbers and packaging for Asians, which includes dragons in a red and golden color wrapping, may sound a little queer to the Western exporter but that’s the appeal for the Asian Chinese and could help boost sales by this mere change in color and logo. For example, it is best to avoid using triangular shapes in Hong Kong, Korea, or Taiwan, where the triangle is considered a negative shape. Many imported food items are new and require first time introductions to the local scenario. Thus, promotional campaigns and customer preferences must be taken into account while formulating an entry strategy. In Korea, one should be well prepared to face the problem of “product nationalism”, where the domestic product loyalty is still strong. Howdy partner Daniel Lim, owner and manager of a boutique wine shop ‘Cellar Deluxe’ told Asia Food Journal that from a shop having only 30% of his wines from Australia in 1998, he has migrated to having nearly 85% this year. The reason for shift to Australian wines is due to the demand, ease of buying, geographic proximity and value for money. His preference is to deal with vineyards directly, and merchants if necessary, for more labels than the vineyards can supply. “Two and a half years back there were around 700 wine importers in Singapore, which includes whole sellers, restaurants, supermarkets and boutique shops etc. Now, there are far-too-many!” Lim said. One of the best ways for food and beverage manufacturers to showcase their products is through trade forums and exhibitions. These serve as an international onestop marketplace for both buyers and sellers. In Singapore, the largest exhibition of food & beverage products and equipments in Asia happens every two years at Food & Hotel Asia. “Listing the company and product type in e-marketplace business export directories, can prove to be a smart way of doing business in the digital age,” says Bernard Forey, chairman of the Richfield Vineyard in Australia. The International Business Opportunities (IBO) from IE Singapore, a free online service, serves as a matching tool for Singapore-based companies looking for foreign business partners and for foreign companies seeking business in Singapore. IE Singapore—International Business Opportunities (IBO) www.businesscontact.gov.sg/ehtml/home.asp