Global Insights – April 2022

China

There’s little-to-no-likelihood of China opening up in this half of 2022, and just a slim chance we may start to see signs of a gradual opening later in the year. For foreign brands with stakeholders based outside the mainland, it is a challenging time. Closed borders make it much more difficult to build and maintain relationships with team members and key partners, but also difficult to keep abreast of the market, and ensure that things are tracking as they should be.

With the inability to travel to China, many foreign brands have increased their reliance on distributors. While some brands have flourished through great relationships, many haven’t been quite as lucky. This article entitled Losing control of your brand has some great advice for those working with distributors.

The inability to travel has seen many stakeholders become more reliant on teams on the ground in China. This isn’t always a bad thing, but it can be if stakeholders are flying blind. Foreign brands working with localised teams know that it is a balancing act: it’s important to ensure on-the-ground staff have autonomy to localise for the unique China market and make decisions swiftly. But at the same time you’re ultimately responsible for ensuring your brand stays true to its roots and doesn’t stray too far from the very DNA that makes it successful and appealing to Chinese consumers. Once borders open again, the lines between products sold in China and those outside will blur again, so it’s will be critical for businesses to ensure that things haven’t strayed too much.

This update was written with the help of the team at China Skinny

UK & Europe

 Across the region many of our community are feeling the impact of the conflict between Ukraine and Russia and are having to navigate developments day by day. Many people are working to assist and support colleagues, partners and friends on the ground in the two countries as best they are physically able.

One Kea member shared with me that “from London to Ukraine is about 1100 miles, about the same length as New Zealand”.  This really brings home how close this conflict is to us.

Businesses throughout Europe and and the UK are bracing for even higher inflation and disruption to their supply chains. Experts say the conflict will amplify the economic impact of the pandemic and reverberate through an increase in the cost of energy, shipping and commodities.

The Ministry of Foreign Affairs and Trade is warning the conflict will cause significant anxiety for many key trading partners in Europe, and that an extended invasion will weigh on global economic growth, and could potentially affect the medium term prospects for New Zealand. The price of a wide range of globally traded commodities, particularly oil and wheat, have already risen and are likely to increase further. The flow on financial effects could also affect the value of the New Zealand dollar.

For now Kiwi businesses are being urged to stay across the situation and examine not only their direct exposure to the conflict, but also the exposure of their suppliers. Many are warning that the ongoing events shouldn’t just be treated as a regional conflict but rather as a global one.

Sara Fogarty, Kea UK/Europe Regional Director

North America

It has been an eventful month in New York with the Russia-Ukraine conflict dominating headlines. President Joe Biden is using strong words to denounce the situation and the US has imposed a number of sanctions on Russia. Recent modelling suggests that States with greater exposure to the financial markets, like New York and Connecticut, would be under pressure as extended hostilities after a Russian occupation of Ukraine heighten uncertainty and put a further big dent in stock prices. For businesses there isn’t much to be done except to stay across developments and be aware of increasing supply chain disruptions and possible rising costs of things like fuel. Unfortunately it’s another potential blow after several years of hardship caused by the pandemic.

Looking at the pandemic the US reached a milestone this month as the country acknowledged the second anniversary of the arrival of Covid-19. Today, omicron infections are at an all-time low, and the vast majority of pandemic restrictions have been lifted throughout the US. New York has seen an end in vaccine mandates for gyms, restaurants, and theatres here in New York; however public transport and air travel will still require masks for the time being. Many employees are now starting to return to offices but won’t be required to work in person for the entire week. NZ companies need to be aware of this when seeking new hires. In a recent Pew survey, 60% of US workers able to do their jobs from home say that, given a choice, they’d prefer to work from home all or most of the time.

And finally a bipartisan bill, called the Sunshine Protection Act, was passed unanimously by the Senate this week to make daylight saving time permanent across the United States next year. The bill still needs approval from the House and then President Biden to sign into law, but everything points to this becoming a reality again here in the USA. They were here before in 1973 when they passed a similar law only to be reversed the following year. Watch this space.

Gary Fortune, Kea North America Regional Director

New Zealand

The big news this month is the announcement that New Zealand is ready to reconnect to the world with the country’s border reopening to non citizens from next month, much earlier than originally indicated.

Fully vaccinated Australian citizens and permanent residents will be able to enter the country without self-isolation or managed isolation and quarantine [MIQ] from 11:59pm 12 April 2022, in time for the Australian school holidays and well in advance of the ski season. Fully vaccinated visitors from visa waiver countries, and visitors from other countries who already hold a valid visitor visa will be less than three weeks later, from 11:59pm 1 May 2022.

Travellers will still need proof of a recent negative Covid test result from pre-departure and proof of vaccination.

Fully vaccinated people including New Zealand citizens and residents, some skilled workers and travellers on working holiday schemes can already enter New Zealand now from anywhere in the world without the need to self-isolate or enter MIQ.  

Tourism New Zealand is poised to launch a new global campaign to let the world know Aotearoa is open for business. However domestic tourism would continue to be a focus as rebuilding the tourism sector is expected to take some time.

Prior to COVID-19, tourism contributed 5.5 per cent to GDP, bringing in about $41 billion altogether, international making up $17 billion of that. It was also responsible for 8 per cent of our national workforce.

The Unite Against Covid 19 website has up-to-date information for all people planning travel to New Zealand, including those leaving and returning for holiday or business trips. The site includes details on pre-departure tests, vaccination requirements and testing requirements on return. 

Saya Wahrlich, Global Director, Government & Industry