Shanghai Show-offs - Australian SMEs in China

JULY 1 saw the Australian Business Chamber’s showcase in ShanghaiMart open with 200 products on display, and the first firm orders are starting to come in. The Chamber’s Export Growth China strategy revolves around showcasing Australian products at the new Shanghai facility coupled with targetted displays at regional trade fairs through China . . .

FORMER Socceroos legend Tim Cahill, now playing for Shanghai Shenhua in the China Super League, will join NSW Trade Minister Stuart Ayres to officially launch Australia’s biggest permanent showcase of export products in China at ShanghaiMart on August 20.
Now 35, Cahill has developed a number of interests outside soccer, and one of these is a range of personal grooming products for men, branded as VitaMan.
Cahill is a shareholder in VitaMan, which now has its Australian-manufactured products on display at the Australian Business Chamber showroom in Shanghai.
Sixty Australian companies are showcasing a total of 200 Australian products at the facility, created by the NSW Business Chamber as part of its Export Growth China programme to bring more Australian SMEs into the China market (see ATI December 2014).
Products went on display from July 1, and the first major sale, for an Australian-made throat medication for children, has already been signed off. Stephen Cartwright, CEO of the NSW Business Chamber, says a second sales contract, with a NSW wine company, is a matter of days away.
Cartwright says the original concept for the Shanghai Showroom envisaged 100 companies offering 200 products. “Now we find companies wanting to show more products, so it has come down to 60 companies offering 200 products in this first phase,” he says.
“We already have four or five companies booked in for the second round.”
The Chamber has developed what it calls an ‘Iconic Partner’ programme, where an existing Australian exporter to China, such as Norco or Akubra, can sponsor an SME in their region who could benefit from exposure through the Shanghai showroom.
Service companies such as PwC and advisory businesses have also approached the Chamber, offering to sponsor some of their smaller clients into the programme.
Cartwright says the initial product mix on display largely covers food, wine and neutraceuticals. These were targetted because, in the opening phases of the programme, there was a preference to avoid products which
required refrigeration.
The NSW Business Chamber has committed AUD2.5 million to its Shanghai initiative.
Cartwright told ATI: “I am incredibly happy with the response. The budgets we did 18 months ago are on track, and there is clearly interest from Chinese buyers. Our members are starting already to see the benefits.
“I think some early case studies will help promote this initiative across Australia.”
The NSW Business Chamber has created a team of trade specialists in both China and Sydney to co-ordinate its Export Growth China programme.  Cartwright says products on display in Shanghai are being taken to regional trade fairs throughout China to promote them to a wider market. Staff in China are also identifying channels through which they can wholesale the products on offer.
“We are actually getting more success in going to the regional areas, then inviting potential buyers to the Shanghai showroom,” says Cartwright. “We had one session from a second-tier city where 200 came along for the presentation. How many of those were tyre-kickers, of course we don’t know, but there does seem to be a lot of enthusiasm for clean and green and that sort of thing.”
Cartwright says one surprise in the learning curve has been the number of Chamber members wanting the Chamber to act as their sales agent, on a commission basis, in China.
“That is going to help us pay off the investment in the showroom,” he says. “If I can get the China showroom to pay itself back, I can open another showroom in Tokyo or Korea, taking Australian SMEs into other Asian markets. That is pretty exciting.” In an operational sense, Cartwright expects the Export Growth China initiative to be breaking even on a month-to-month basis in 2016.
A majority of the 60 companies so far engaged in the programme are from NSW, but Cartwright remains optimistic that Chambers outside NSW will come to more fully embrace the opportunities offered.
He says: “Initially, you suffer from the ‘not invented here’ syndrome – but increasingly, they will see what the Export Growth China programme is. The early adopters, Chambers in South Australia and Tasmania, have adopted the programme as their own.” Cartwright adds that members of all 600 Business Chambers in Australia are eligible to participate.
Of the current Australian trade union campaign, led by the militant CMFEU, against the China-Australia Free Trade Agreement, Cartwright is scathing:
“The unions are just wrong about this,” he told ATI. “This campaign is deliberate, an opportunity to attack the (Federal Liberal) government. It is a disaster, and we have to stop it.
“The Labor Opposition knows that it is just cheap political point-scoring because Labor was involved for years in negotiating this agreement.
“If you are a small economy, and you negotiate a trade agreement with a big economy, it almost does not matter what the big economy gets, you should sign the agreement because the small economy will always do way better out of it than the big economy.
“That is why the Americans are struggling with the TPP. They have a massive domestic economy, and to open that up to smaller economies will cause pain.”