The pending steps to conquer China
When Luis Schmidt began to travel periodically to China, at the beginning of the nineties, the differences with the current reality were not only in the 60 hours of travel to arrive, in front of the 30 of today, or in the null knowledge of the wine that they had the orientals. At that time, at 1992, the president of Fedefruta remembers that Chile did not have free trade agreements (FTA) with other countries, that Europe sounded like a distant destination to send fresh fruits and that exporting food to Asia was not even a dream .
"In 1997, when I tried to convince the Ministry of Agriculture to install an experimental farm in China, they told me that I was crazy, that between Chile and China there was nothing but copper. And I insisted that this was going to change very fast"says Luis Schmidt, about the Chilean-Chinese Demonstrative Farm that made our fruit production standards known to Asians, which still exists today and helped streamline the agricultural issues of the FTA signed in 2005, the first bilateral agreement signed China with another country.
The change, he acknowledges, was faster than he thought. And it continues to impress. If when he was ambassador to China, during the government of Sebastián Piñera, Chile was in the position 12 as a supplier of fruit, last year came to the first place -in terms of value-, something that seemed unattainable and that was driven by cherries , but also for grapes, blueberries, plums and avocados.
"The possibilities are enormous. Future demand will be and will continue to grow, and the market is. The difference is that today we have competitors who are skilled, so we have to do the work that corresponds to us as a country, differentiate ourselves and go out and look for opportunities“Schmidt says.
And those spaces are not only in the fruit. Those who know the Chinese market in depth and do business with that country affirm that the attraction is for all foods, including processed, white and red meats, wines and seafood, in which Chile enters without tariffs and that present growing demand , by the rise of the middle class and the change in their eating habits.
In spite of the increase of 30 annual% that have registered in average the exports of foods to China in the last ten years, and that the past year was of 47%, there are pending challenges to conquer that market and face the competition, how to promote the country image associated with each product, learn more about the Chinese business culture and its tastes, and explore new niches, especially in the cities of the interior.
Chile, the missing brand
Normally, China establishes tariffs between 10% and 15% for incoming agricultural products and the countries with which it has free trade agreements -now adding 14 to Chile- sets quotas for the most sensitive products, such as dairy products. New Zealand, which only enter free until the beginning of January.
With Chile, it does not have these restrictions and, in addition, it is the country with the most current phytosanitary access protocols, for most fruits, fish, seafood, meats and even live animals, where negotiation is pending. of pears, hazelnuts, citrus fruits and a group of frozen fruits.
It is also pending that the Chinese know that these foods are Chilean. When they eat an apple, a blueberry jar or a salmon they do not know where they come from, and for the last seven years they have only known wine and cherries, because of the importance they have for the Lunar New Year.
"We have a limited roof in China if they do not associate the good products they consume with Chile. And for that we have to develop the country image with associative campaigns, among all the guilds. Wines of Chile and Asoex are very clear, because they have developed powerful campaigns, but there is no incentive for them to work together and complement each other.“says Andreas Pierotic, Chile's commercial attaché in Beijing, one of the four offices that ProChile maintains in China.
The work goes from putting the name or flag of Chile in the fruit boxes -some exporters, as well as producing in Peru or another country, they just put the name of the company- until using Chinese characters on the labels, but it also goes through incentivize tourism, an area in which the country receives 24 thousand Chinese a year, compared to the 320 thousand in New Zealand and 1,2 million in Australia.
"Chile today sells more fruit, but they have managed to better position their country brand, since the most direct sample of a good development of the country image is the amount of tourists that visit youPierotic explains.
The president of Expocarnes - the guild that gathers pig, chicken and turkey exporters -, Juan Carlos Domínguez, insists that it is also pending to increase the resources for promotion, both public and private, which today is less than that countries like Peru, Colombia or Mexico.
"In May I was at the SIAL fair in Shanghai, and Chile only had an Agrosuper stand, something punctual, but you saw those from Peru or Mexico and they called attention. And in the case of Argentina, it was up to President Mauricio Macri promoting his products. We have fallen asleep on our laurels, confident in our advantages and good agreements“he comments.
In fresh fruits, the president of Asoex, Ronald Bown, highlights that a good way to support the country's image is to take care of the phytosanitary aspect, something that other guilds also consider fundamental.
"We must explore how to build relationships with new trends in e-commerce, social networks and specialty stores, as well as in wholesale markets and supermarkets, and for that it is key to have a person in China and maintain promotional campaignsBown adds.
A good example to follow is the wine industry, one of the most invested in promotion in China, as 226 companies export to that market. For next year, its commercial strategy will be around US $ 2 million, focused on positioning Chile as a producer of fine wines -especially among young people, digitally- and with activities for marketers and opinion leaders.
"We hope that our country continues to grow in line with China, improving its participation at 10% annual rates. It is estimated that 2025 will have more than 100 million consumers of imported wine, who will boost per capita consumption, which today is 1,2 liters“, projects the president of Vinos de Chile, Mario Pablo Silva. He also comments that wines with a greater display of fruit and acidity, such as Sauvignon Blanc, would have attractive prospects.
Know the local culture in depth
Contrary to what happens in the West, when doing business in China, the main thing is not just prices or quality, a good website or an attractive catalog. The key lies in the development of long-term relationships and trust. Something in which the Chileans are still debited.
"It is not enough to go once. They have to go regularly, talk, because they are very different mentalities. They were taught six thousand years ago that businesses are made with their family and with people related to the State, so they still look at a foreigner strangely, and that implies relating in a different way.“, explains Luis Schmidt, as one of the points that is difficult to develop.
He believes that, just as the Chinese are acquiring Western knowledge and customs, in Chile it is still necessary to study their culture more deeply. And that greater local knowledge can also open new business windows.
The commercial attaché Andreas Pierotic projects that by knowing the particular tastes of Asians and their customs, ideas may arise to develop processed foods from Chile.
"Our companies do not know the tastes of Chinese consumers. For example, Chile exports many chicken legs, which are processed and sold here as snacks, with flavorings that add value, and that could be developed perfectly at source; that's why we have a fund for businessmen to visit China and detect the potential in the market", Explain.
In this sense, he argues that even large cities, such as Shanghai or Beijing, have different habits -the first one has a healthier diet- that can open spaces for Chilean superfoods, such as blueberry juices or products made with maqui.
Explore the interior
While he was ambassador to China, four years ago, Luis Schmidt participated in an Icare forum in Santiago and, in front of some 200 people, he asked who knew Chongqing, a city in the interior, with more than 30 million inhabitants. Only Chile's commercial attaché in China raised his hand. Nobody else knew how to get to do business there, to one of the most populated cities in the world.
"We must make efforts to be inside, because that will give us very good dividends in the future. You have to look at China as a continent, and for that you have to open more consulates, more ProChile offices“, he raises.
Andreas Pierotic believes that ProChile is likely to open a fifth office in the interior of China in two years, although he warns that resources are limited and that it is not yet defined where it could be. “No country in Latin America has offices outside of Beijing, Shanghai and Ghuangzhou currently, but other competitors have already opened in Shengdou“he comments.
The importance of the cities of the interior is that, without considering the big cities, China has more than 80 with more than two million inhabitants, where until now it costs imported food to arrive. In addition, some large cities grow at rates above the national economy average, 10% to 15% annual, according to ProChile.
Source: Revista del Campo
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