How has COVID 19 changed how you foster/enhance your key relationships in China?
We noticed a flattening off or decrease in demand from China during the initial COVID period. This alongside the fact we are unable to visit China in the current climate, which we would normally do 3-4 times a year, meant that we sought to maintain strong relationships through an increase in our available communications such as phone, email, Zoom and WeChat platforms, with that contact often daily or several times per day.
How do you maintain a physical presence?
We do not have a physical representation in the China market, as it is hard to do, so we need to rely on having strong communications from NZ and partnering with reliable players in the Chinese market.
How do your HB-based staff now interact with those that you do business with in China?
Through very regular contact. The main forum for contact is WeChat, which is a messaging and social media-based app. It’s an excellent platform for all communication with customers across China. Sales are often made through WeChat communication and finalised with email confirmations to include associated contracts.
We have created very strong relationships with many good importers and buyers over the past 20-25 years. COVID19 was a timely reminder of how important the strength of those relationships are, given the current difficult and challenging times within the exporting environment.
Are you seeing a downturn or do you remain optimistic about trade in China?
COVID has definitely led to a change in the buying behaviour in this market and our expectation is that will continue and be the new norm. China was in somewhat of a transformation cycle as the market was maturing after importing meat from NZ for the past 25 years. Within that period, it became most important and influential market for NZ Sheepmeat and Beef products, taking in excess of 50 percent of our lamb and mutton and more than 35 percent of our beef. The downturn in China started about a year ago, initially with the impact of ASF (African Swine Fever) on their pork production. Consequently the Chinese Government intervened with their food policies, leading to a major decrease and collapse of approximately 30-40 percent in their Sheepmeat and Beef import prices (this happeained over a short timeframe of about 6-8 weeks). While traditional Chinese market items moved slow but steady, the spot and trading market in China took a larger hit. That disruption then rolled into COVID in February 2020, which will continue to impact buyer behaviour and confidence for a while yet. We’ve since seen some recovery lead by our approaching their traditional winter consumption period (where demand increases) and Chinese New Year buying, which is currently taking place and resulting in a positive spike in the market. NZ is still very well regarded and well placed to get priority having a strong preference and acceptance for its primary production and products. NZ’s competitive advantage on import duties further strengthens our position here and having a very strong economic base, presence and unique position within this market we are optimistic there will continue to be a good future for the business in the years ahead.
