Global Insights – November 2021

CHINA

China’s Vice Premier says his country’s economic growth will exceed its target in 2021, despite multiple headwinds threatening to derail recovery from the coronavirus pandemic. Vice Premier Liu He addressed a virtual summit focused on relations between China and Europe this week and told audiences that he was “abundantly confident about China’s economy in 2022.” 

In 2022 China is pledging to cultivate a better environment for small and medium-sized enterprises and foreign companies and would also expand market access for overseas firms and promote fair competition. This is good news for Kiwi exporters. Here are three key opportunities businesses can target in 2022. 

Embrace local tastes

Kiwi F&B exporters looking to crack China’s flooded market must be willing to come up with original ways to tweak their products to cater to local tastes. A good example of this is McDonald’s which recently launched spicy chilli oil ice cream sundaes said to be inspired by the Chinese Biangbiang noodles. Another big fast food chain KFC is more adventurous, it’s localised menu includes: rice, noodles, Chinese deep fried dough sticks and hotpot style skewers. Taking a standard product and giving it a unique or novel twist that appeals to customers is a surefire way to capture attention.

Aim for the whole experience

Chinese consumers want their experience to be consistent and integrated wherever they are and the prevalence of scanning QR codes in shops and restaurants means that loyalty programs, payments and other experiences can be seamlessly integrated with smartphones. More physical stores are enhancing experiences through tech-driven features and live streaming, but also through physical forms such as workshops and event spaces, which are also integrated through tech. 82% of venture capital invested into Chinese offline retail store openings last year was directed at retailers who were integrated online and offline.

Chinese consumers now see shopping as a whole experience. They want to be entertained, informed and also make purchases at the same time. This sentiment is great news for marketers, but it also means that consumers have high expectations for their entire customer journey. They want more than just a transaction. This will push Kiwi exporters to use innovation and technology to elevate their brands and products in 2022. 

Look outside the big cities

Kiwi exporters should look outside of the main areas in 2022 as new growth hotspots emerge across China. Currently China’s 30 largest cities are home to around a quarter of the nation’s population and drive almost half of household consumption. However there are substantial growth opportunities beyond this list, with some cities outside of the top 30 posting faster growth. Household consumption has been growing by double digits in Guiyang, for instance. Many companies are anticipating these types of opportunities, expanding their reach to include more cities in China where incomes are also rising.

UK & EUROPE

Across UK & Europe the wintery beauty shines as cities and towns are decorated for the festive season. Christmas parties and nativities are underway with full vigour as we try and get as much in as possible before any further restrictions are imposed. 

We have been lucky to host various events in London over the past 4 months, it has been incredible to reconnect with each other. Our first event at the end of September at New Zealand House, was for many, the first time that they had seen friends in 18 months. There is concern across much of the UK and Europe about how the Omicron variant could affect things moving forward and much of the mood remains cautious. However people are hopeful for 2022 and there are a number of opportunities for Kiwi businesses in the new year. 

Open for business

UK & Europe markets are open for business and there is great opportunity for those looking to undertake their OE or to move into the market. Covid restrictions have become part and parcel of everyday life and the job market is strong for those that are looking for an OE, further changes and new laws to allow skilled professionals from around the world to have their qualifications recognised in the UK, and as well as changes still to be announced on the New Zealand-UK Working Holiday/Youth Mobility scheme, will make this easier. 

FTA developments

Implementation of Free Trade Agreements in the UK and developments on the EU-NZ FTA will remain a major focus for 2022. These two agreements create many opportunities for outward looking New Zealand businesses. Exporters will  need to focus and understand their current business operations and cost structures. Staying in touch with your customers, distribution partners and networks in-market will be key to making sure that you are able to timely implement any cost changes that need to be made and that you can work with them also to help them understand the importance and opportunities that these FTA Agreements offer for their businesses. 

Health Tech boom

The UK health-tech sector is booming. Venture capital investment in this area has increased 9 times since 2016 – sitting at around $3.8 (USD) billion in 2021 so far. We have many senior Kiwi leaders assisting in this sector and they are hungry to support more Kiwi businesses looking offshore.

Return of travel

MIQ changes in New Zealand and borders opening next year mean we are expecting a flood of visitors to the markets – come prepared! Don’t just turn up and expect a meeting next week, don’t turn up in shorts and a tee-shirt – we may have hung out in athleisure wear for the past 18 months, but now that offices are back, so are the working wardrobes and full diaries so make sure if you are planning to travel you book things well in advance to make the most of your time in market. 

Sara Fogarty, Kea UK/Europe Regional Director

North America

Festive celebrations well underway

The festive season is in full swing here in New York City. Thanksgiving saw record numbers of Americans travel to be with families, many for the first time since the pandemic struck in March 2020. The TSA said it screened 20 million travelers over the Thanksgiving week, in all about 89% of what it saw pre-pandemic. 

The annual Macy’s parade attracted over 2.5 million people to New York, many lining the streets to get a glimpse of the six-story balloons, marching bands, and dancers. Last year, organizers shortened the event route with no spectators, so this year celebrated how far they had come.

Hanukkah, the Jewish festival of lights, is underway, and the Rockefeller tree is ready to be switched on. Despite the ever present threat of the pandemic people are upbeat about moving around to see the sights this year.                                

Saying it has been a tough year for this part of the world is an understatement but there is an air of optimism. Masks are a regular fixture as is showing proof of vaccination but it’s just become a part of daily life. 

Since starting with Kea, I have loved meeting the inspiring New Zealand businesses coming to the US. The opportunities that I see here for our exporters are substantial across all sectors. 

Many companies are targeting the USA, which is exciting to see. I have seen businesses recently focused on the ever-expanding healthcare industry, eco-friendly and sustainable consumer products, and tech-savvy SaaS solutions that seem to be targeting almost every industry. 

Our creative community has been house-bound for the past year, and I hope we will see this community again spreading its wings with the opening of the border. I think it is important to mention how entwined our arts, culture, and commerce are in New Zealand’s international identity and the vital role they play in enhancing economic development at home and abroad. 

Technology and shiny new things for New Zealand businesses in 2022

For a new generation of planet-conscious companies here in the US, price isn’t always the main driver. Many new and older businesses are now razor-focused on being responsible, environmentally friendly, and trustworthy companies. There are opportunities for our Kiwi businesses involved in apparel, cosmetics, luxury goods, food and beverage, wines, and spirits. There are also opportunities to support this industry with sustainable technologies to minimize adverse environmental impacts for good business health and prospects.

Since the pandemic started, we now have a new set of digital behaviors, from online shopping and video meetings to fitness classes and schooling. Opportunity abounds for our entrepreneurs in the gaming and tech sector.

International Trade and travel.

The end of the year is a natural time to reflect on and analyze your business. It’s also the perfect time to prepare for that long-awaited trip now the borders will be open. Connect with people who can help with your market intelligence by reaching out to us here at Kea. The insights you will gain from building your offshore community are invaluable.

For many exporters, travel to events and business summits was a regular part of doing business globally. Attending the world’s many trade fairs and business summits is a top priority for showcasing products and services and the ever-important face-to-face meeting schedules, seminars, and speaking engagements.

Hopping from one country to another on the conference circuit was just part of being an exporter. Our New Zealanders looking to travel out into the world again will need to be aware of other countries and their hardships throughout this pandemic. Things like shaking hands are not always expected or reciprocated, and you shouldn’t be offended. Wear your mask everywhere. Allow extra time when traveling. With several additional layers at airports, it is a time for patience and preparation; international travel is different now. As Kiwi, we are respectful and considerate travelers, but it’s still worth remembering how different things were over here. 

2021 was undoubtedly like no other year that we would have ever imagined. As I close out the year, I find myself incredibly grateful and humbled by our Kiwi diaspora whom I have met and their willingness to offer their time, expertise, and immense market knowledge to benefit their fellow New Zealand business community. I appreciate your support throughout 2021.

Gary Fortune, Kea North America Regional Director