Business between New Zealand and China is returning to pre-covid levels as China lifts the last of its covid regulations – but a new report warns that NZ’s largest export market has changed.
A report by the NZ Consulate-General in Shanghai released by the Ministry of Foreign Affairs and Trade says China’s supply chains “are rapidly improving”, and the pandemic has accelerated the growth of new online selling channels.
“Consumers are shifting to instant-purchase, live-streaming influencer sales channels like Douyin (often citing the convenience of being able to ask live questions), and away from mainstream apps or web platforms like Tmall or JD.com, which also have a reputation as being more expensive for product sellers,” the report says.
The report notes that e-commerce has drawbacks, requiring companies to pay for views of their products or pay large sums and stockpile inventory for popular live-streamers.
Margins from live-stream sales are usually not especially high.
Big box retailers such as Costco and Sam’s Club are growing in popularity and are being replicated by Chinese supermarkets Hema Fresh and RT Mart.
The pandemic and China’s response to it caused many smaller retailers to close or become exclusively e-commerce outlets.
The report also notes Chinese consumers are increasingly health conscious, and environmental sustainability is growing in prominence.
Chinese food and beverage brands are also increasingly competitive at the top end of markets due to consumers’ growing sense of pride in domestic products – and local sellers’ ability to respond quickly to changing demand.
“But it is also because Chinese companies have improved product quality and are investing significantly in understanding local consumer behaviour and are adept at quickly catering to changing demands.”
The report notes that port access and processing have returned to normal after several years of disruption.
“China’s removal of covid inspections of the cold chain has saved significant cost and reduced risk.”
Airline capacity on the Auckland-to-Shanghai route is increasing as demand grows for business travellers and tourists, due in part to China lifting requirements for a negative pre-departure PCR test for those travelling from NZ.
“Companies are inaugurating new offices in Shanghai and seeking to take clients and influencers to New Zealand,” the report says.
“Visa processing on both sides is ramping up to meet demand, although it is important to apply early.”