Diverse Chinese market as a great export opportunity for Estonia
Anneli Vilu, Enterprise Estonia’s Export Adviser in China, finds that with adequate marketing and a great partner, virtually anything can be exported to China.
According to Vilu, a lot of Estonians and Europeans still view China as a lagging country that manufactures cheap goods, even though China has become (at least when focusing on major cities) a modern state, the technical level, e-solutions and mobile solutions are clearly ahead of most countries in the world. “This also means that there is an ever-increasing market and demanding consumers with significant purchasing power, which in turn creates improved export opportunities for Estonian companies as well.”
However, when planning exports to this large country, it is vital to remember one golden rule: the goods have to be adapted to the Chinese market and the preferences of Chinese people – products ought to be sweeter, more colourful and fragrant; attention should be paid to maximizing the cuteness factor by adding all sorts of decorations and embellishments.
Vilu finds that it is best to focus on two main target groups: somewhat spoilt and self-centered youth from families with only one child and middle-aged people with families. “The first group is especially keen on purchasing beauty, enjoyment and status products, as well as clothing, footwear and services. Middle-aged people with families make up the majority of the growing Chinese middle class, which is becoming richer and richer, and form the second large target group
European origin as a sufficient guarantee of quality
Also working in favour of Estonian exporters is the fact that the Chinese don’t value their own products very highly and most goods are imported from abroad. “In Europe and some places of the world, Estonian goods might sometimes still be viewed as items with poor Eastern European quality; whereas, in China no such distinction is made among European goods. They might not know of Estonia, but the fact that we belong in the European Union and are located in Northern Europe can be a perfectly satisfactory quality assurance,” explained Vilu.
In addition to private clients, Estonian companies could also go after Chinese business clients, for example, producers of goods and service providers, who are in need of various equipment, raw materials, services or even practice experiences.
The most common challenge that exporters are faced with when entering the Chinese market it that they are required to send very large shipments of goods right from the start. “It is definitely possible to sell smaller amounts as well, but this required a lot of preliminary work to seek out suitable mediators and talk things though with them. It might be wise to select an inland province and target a certain smaller city, consumer group or commercial chain,” added Vilu.
According to her, China is not comparable to Europe when it comes to size, yet the Chinese market is not homogenous either. “People’s consumer habits vary greatly across the climate region, by purchasing power and local traditions. In general, the highest standard of living and highest wage level can be found in major cities on the east coast of China, in Beijing, Shanghai, Guangzhou and the surrounding areas. But there are several multi-million inhabitant cities in every inland province as well, where the middle class and purchasing power are growing with each year.”
In case the first attempt to enter the Chinese market should, for some reason, not be successful, Vilu finds that it is wise to try again. “There are several options to do so: you could find a new cooperation partner, modify your product to better suit the Chinese market and consumers, test various sales channels (e.g. e-commerce), test sales in another region (e.g. not the first metropolis, but a smaller province with fast-growing economy). There are a few precautionary measures that should always be taken: protecting your brand, conducting thorough background research on your export partner and selecting secure payment methods.”
In cooperation with the Asian information centre at Enterprise Estonia, a package has been compiled for companies aiming to enter the Chinese market, part of which is free of charge. “We offer readiness evaluation for entering the Chinese market and initial counselling, background check of export partners, preparation of market analysis and search of an export partner,” listed Vilu. Enterprise Estonia also organises various Chinese-themed events and trips.
Find the contacts to all Estonian export advisors in 14 countries here.