Global Insights – Novemer 2022
Our Kea Regional Directors give on-the-ground insights into what is happening in their region and the opportunities this presents for New Zealand export businesses.
What an extraordinary November China Markets have had! This year marked its 14th Double 11 Shopping Festival. As the most representative shopping season in China, Double 11 sends consumers into a “buying” frenzy. JD.com announced a 2022 transaction amount of CNY349.1 billion (US$4.93 billion), which represents a year-on-year growth rate of 28.58%! What impressed consumers most about this year’s Double 11 was the interaction between online and offline transactions, fast delivery and the benefits of interest-free instalment payments. Jerry Hong, GM of China for New Zealand’s Whitehaven Wine Company said Whitehaven’s imported wine category grew double digits in this Double 11 with online sales contributing to nearly 50% of their total sales in October and November. Mr. Hong also observes that big e-commerce platforms like Tmall are becoming more vertical and specialised as consumers become more sophisticated. New platforms flourished during COVID lockdown such as Kuaituantuan – an emerging online platform, which can generate great sales.
This month we also marked the 5th China International Import Expo (CIIE) which took place from 5 November to 10 November in Shanghai. Per official release, there is an intended turnover of US$73.52 billion on a one-year basis, an increase of 3.9% over the previous year. There are more than 40 New Zealand exporters participating in the CIIE this year covering F&B, Consumer Goods and Manufacturing sectors. Kea supported the New Zealand Featured Brands Promotion Reception held on 9 November at New Zealand Central in Shanghai, which was attended by the Consul-General of New Zealand Mr. Stephen Wang. The event unveiled nearly 20 New Zealand products including home living, food and wine, fashion and skincare that are not yet widely known in the China market, Some of the brands including Pacific Alpacas, Roimatawe and Eden Orchards were very well received with distributors showed interest in further talks with the brands representatives on site.
New Zealand Ambassador To China H.E.Clare Fearnley came to Shanghai as her 5th year running visit to the CIIE. There were a series of events that took place when ambassadors were in town. I was invited to join the Women’s Leadership Panel and the Reception in celebration of the 50th Anniversary of diplomatic relations between New Zealand and China hosted by the Consulate General of New Zealand in Shanghai. The enthusiasm to strengthen the business connections between the two countries is growing!
And good news on the COVID Control policy. On 11 November, China slashed the quarantine Finally, in welcome news for Kiwi exporters looking to visit China, China has announced it will reduce its mandatory quarantine period for foreigners arriving in mainland China by two days (5 days centralised quarantine and 3 days home isolation). Pre-departure testing requirements have also changed to 1 PCR test within 48 hours of boarding a flight to mainland China, and the removal of the ‘circuit breaker’ rule for airlines that exceeded a certain number of COVID cases per flight.
Rebecca Bao, China Regional Director
UK & Europe
The busy end of 2022 is upon us. At Kea London we have been hosting various events throughout the month and looking very much forward to final community events of the year.
We were honoured to host an evening with Sir John Kirwan (JK), Groov and NZ Trade & Enterprise team at the London High Commission. 65 of us joined together to hear from JK alongside Simon Mundie from BBC. JK’s honesty and dedication to driving wellbeing, at work, at home, at any part of your day strung many chords with our Kea community and business leaders. Sarah Smart, WCNZ and GM of Epic Dairy noted these key takeaways from the session.
* We must foster a culture of ‘care’ throughout businesses. It needs to be modelled by leaders who can demonstrate vulnerability themselves.
* We must think about wellbeing differently – treat, prevent, perform.
* We can all find simple everyday tools to look after our mental health and not wait until we are ‘at the edge of a cliff’ – find what works for you and your meaningful personal connections eg nature, exercise, food, people.
* Reboot a few times a day. What do we do when our devices overload? We reboot them. Why should we expect different from our minds?
* DOT – just ‘do one thing’ everyday and then DAT – ‘do another thing’ the next day and habit stack. Don’t try to change everything at once and don’t expect everything to work. 30% of the population are unable to meditate…find what works for you.
* Take an AAA battery approach to reading stress symptoms, especially looking for signs of burn out – awareness, acknowledgement and action.
* Celebrate more.
* Give the gift of your time (and care) to others.
In the UK the main discussion has been taken up by the cost of living crisis, keeping track of inflationary pressures, a period of consumer resettling which ultimately affects spend and consumer confidence, which is low and from recent data by Nielsen Consumer, 76.8% of UK Households expect to be severely affected by Cost of Living this winter. UK Inflation keeps climbing with the CPI rising by 11.1% in 12 months to October 2022, up again from an increase also in September of 10.1%. Despite the introduction of the Governments Energy Price Guarantee, gas and electricity prices made up the largest contribution to the change in CPI.
Rising food prices a lot of concern around mortgages and energy costs and monitoring of weekly grocery spend more closely than ever before. At the heart of consumer spending – some keyways that consumers will cut back on by buying own label brands, changing where they shop and how often, buying brands only on promotion, and a real focus on how much each week the spending basket costs.
Despite inflationary pressures as we hit the festive season, consumers still looking to spend disposable income in restaurants / hospitality sector, with 36% in UK & Ireland are going out more frequently than they usually do, and 36% dining out less frequently. It won’t be as challenging as last year with Covid restrictions on us, but cost of living and geo-political uncertainty with Russia and Ukraine war will still have a massive impact.
I think we are all looking forward to 2022 finishing and seeing what 2023 has in store.
Sara Fogarty, Kea UK/Europe Regional Director
Between the midterm elections and the arrival of the holiday season, November has been an eventful month. Attack ads and political discourse have consumed the US as they ramped up to voting day. Kathy Hochul became the first woman elected as New York governor, winning the office outright that she took over in 2021. With finely contested national races and vote counts now over, the GOP won control of the House, and the Democrats retained the majority in the Senate. No real changes for NZ exporters other than the country can now settle down as they head into the end-of-the-year holidays.
New York City’s Pay Transparency Law that kicked in this month is one of the most significant changes NZ companies need to be aware of when recruiting in this part of the world. The law requires companies to list the salary range for jobs they post in NY, with hefty fines and penalties when failing to do so. The new law aims to give job seekers more leverage in salary negotiations and to curb the pay inequality between men and women and minority groups that have existed for decades. The knock-on effect is that many national employers have made the change across all their listings nationwide, an encouraging sign that this might become standard practice for many employers.
Gary Fortune, Kea North America Regional Director
A month packed with travel saw Prime Minister Jacinda Ardern attend the East Asia Summit and a series of Association of South East Asian Nations (ASEAN) events, including meetings with leaders from across the Indo-Pacific. Negotiations on the upgrade of the ASEAN-Australia-New Zealand agreement establishing a Free Trade Area (AANZFTA) have now been largely concluded. New Zealand already benefits from 99% tariff free goods access into the ASEAN region and improvements focused on addressing barriers to trade, improving trade facilitation and delivering on Trade for All.
Prime Minister Ardern then travelled to Viet Nam where she met with Prime Minister Pham Minh Chinh for a summit in Ha Noi. This summit saw the reaffirmation of New Zealand and Viet Nam’s economic ties. From Ha Noi, the Prime Minister led a business delegation to Ho Chi Minh City. She was accompanied on this leg by the Hon Damien O’Connor, Minister for Trade and Export Growth and representatives from a number of New Zealand organisations spanning food and beverage, aviation, education, tech and services. Alongside food production and innovation, the focus was on restoring New Zealand’s attractiveness as a place to study for foreign students. Before the pandemic closed borders Viet Nam was the fourth biggest source of students in New Zealand.
From Viet Nam, Prime Minister Ardern traveled to Bangkok for the APEC Economic Leaders’ Meeting, and spoke at the APEC CEO Summit. She met with Chinese leader Xi Jinping and welcomed the 50th anniversary of diplomatic relations between New Zealand and China this year. The leaders discussed the New Zealand/China bilateral relationship, with the Prime Minister raising issues including the situation in Hong Kong, tension in the Taiwan Strait and the South China Sea.
Also this month New Zealand achieved first place in the 2022 Sustainable Trade Index. The Index ranks New Zealand first of 30 economies that undertake international trade in a manner that supports long-term global sustainable development and assesses three core pillars – economic growth, environmental protection and societal development. Joining New Zealand in the top five were the United Kingdom, Hong Kong, Japan and Singapore. Minister for Trade and Economic Growth Damien O’Connor stated, “We have placed trade at the centre of our economic recovery, successfully securing four FTAs in the past five years. New Zealand being ranked first in the Sustainable Trade Index is an excellent endorsement of our Trade for All agenda and our successes in economic growth, environmental protection, and societal development.”
Saya Wahrlich, Global Director, Government & Industry
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