Fonterra’s chief executive says China keeps changing at pace, and trying to keep up is important.
But Miles Hurrell remains confident about the nation’s economic outlook.
Hurrell was one of three chief executives, alongside Auckland International Airport’s Carrie Hurihanganui and Zespri’s Dan Mathieson, to speak on a panel at the China Business Summit in Auckland on Monday.
Earlier, Prime Minister Chris Hipkins gave a keynote speech saying NZ and China’s relationship would require careful management into the future in the context of an increasingly complex global environment.
Meanwhile, China’s ambassador to NZ, Wang Xiaolong, said NZ and China’s common interests far outweighed their differences, with President Xi Jinping always considering NZ as a “friend” and “partner”.
China is NZ’s largest trading partner, contributing more than $40 billion to the local economy, with dairy, meat and forestry the top three export products.
When the panellists were asked what they saw in China, Hurrell pointed to the rate of change in the country, saying keeping up with that is important.
However, he is not concerned about the economic outlook – “I’m quite bullish on that in the medium term”.
“But it is how we keep up with the changing dynamics and the changing demands of customers or consumers.”
It was expensive to put capital into markets, launch brands and new categories.
“To see your customers move so quickly, it’s hard to keep ahead of, so we’re going to be thinking about that.”
Hurihanganui said while capacity had recovered in NZ, that dynamic could change as other countries come back into the market.
“So, I think it’s understanding those dynamics as that comes into play, it had both opportunities to see that turbocharged, but it also had the opportunity to see that plateau as we go forward.”
Through covid, the airport tried to maintain “boots on the ground” to stay connected and continue to build relationships in China.
“I think if you look at the pace of the recovery coming out of China, that certainly has reaped the rewards.”
NZ being selected as one of the first 20 countries for Chinese tourists to visit after its borders reopened has “given us a strong head start” and has positioned NZ very well going forward, she said.
Mathieson said that, as well as the economic uncertainty, he believes NZ is going to have to work harder to give consumers a reason to buy NZ products “at the prices we’re charging”.
The kiwifruit exporter currently sells around 25% of its total crop in China, contributing about $1bn a year to the NZ economy.
The company has made sure it had become an organisation embedded in China, he said.
One of the “big challenges” that has been there for some time is around attracting “great people”.
“China is moving very quickly, attracting some great brands there. That competition for top talent had never been stronger and so finding ways to attract the best people to your company and work for you is one of the big challenges.”
One of the biggest “evolutions” in the market is e-commerce, with 40% of Zespri’s fruit in China now delivered directly to the consumer.
Mathieson said that is expected to grow to 50% or 60% over the next two years.