Sociedade Portuguesa de Inovação Insert project logos in this area (use the slide master) 3,5/3,5 CM 3,5/3,5 CM 3,5/3,5 CM 3,5/3,5 CM Chinese Market: Chinese Market: Opportunities for Portuguese Opportunities for Portuguese Companies Companies Wu Bin Wu Bin SPI Chief Representative in China SPI Chief Representative in China Porto – 16 Novembro 2004 –Sheraton Porto Hotel, Porto Lisboa – 17 Novembro 2004 – Pequeno Auditório do Nucleo Central do Taguspark, Oeiras
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Sociedade Portuguesa de Inovação Insert project logos in this area (use the slide master) 3,5/3,5 CM Chinese Market: Opportunities for Portuguese Companies.
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Sociedade Portuguesa de Inovação
Insert project logos in this area (use the slide master)3,5/3,5 CM 3,5/3,5 CM 3,5/3,5 CM 3,5/3,5 CM
Chinese Market:Chinese Market:
Opportunities for Portuguese Opportunities for Portuguese CompaniesCompanies
Wu BinWu Bin
SPI Chief Representative in ChinaSPI Chief Representative in China
Porto – 16 Novembro 2004 –Sheraton Porto Hotel, Porto Lisboa – 17 Novembro 2004 – Pequeno Auditório do Nucleo Central do Taguspark, Oeiras
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
1,6/1,6 cm
1,6/1,6 cm Opportunities for Portuguese Companies
SummarySummary
1. Exporting to China
Main Sectors with Export Potential, SWOT Analysis, Successful and Unsuccessful Examples, Practical Advices
2. Buying from China
Why Purchasing in China? What to Purchase from China? Difficulties and Barriers
3. SPI Services
Your partner in China
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
1,6/1,6 cm
1,6/1,6 cmExporting to China
Exporting to ChinaExporting to China
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
1,6/1,6 cm
1,6/1,6 cmExporting to China
Main Sectors with Export Potential to ChinaMain Sectors with Export Potential to China
1. Wine & Drinks2. Foodstuffs3. Top class fabrics & garments4. Top class leather shoes5. Furniture & Houseware (kitchenware, ceramic ware, textiles, decorative items)6. Building Materials (cork products, stones, ceramic tiles, sanitary ware)7. Machine Tools 8. Moulds (plastic injection)
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
1,6/1,6 cm
1,6/1,6 cmExporting to China
SWOT Analysis: WineSWOT Analysis: Wine
1. Strenghts
a. Long-tradition of winemaking;b. Good wine quality;c. Renowned Port Wine Image;d. New comers for Chinese consumers.
2. Weaknesses
a. Lack of image in China;b. Invisible presence/few promotions;c. Local importers/distributors unwilling to buy;d. Little support from wineries.
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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1,6/1,6 cmExporting to China
SWOT Analysis: WineSWOT Analysis: Wine
3. Opportunities
a. Huge potential for imported high-quality wine;b. Few Portuguese wines, little competition;c. Consumers taste/preference.
4. Threats
a. Strong competition/dominance by French, Italian and Spanish wines;
b. Competitive offer from Australia and California;c. Low price from Chile, South African and Argentina.
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
a. The huge market potential needs to be further tapped;
b. Strong demand of CNC machine tools;
c. Local presence will be more competitive for overseas manufacturers in terms of brand, function, quality, price, service, duration of delivery;
d. Turn-key project will be the new mode of business.
4. Threats
a. Competition is always very fierce and, without firm commitment and investment in this market, it is difficult to compete in this sector;
b. Lack of image of Portugal and Portuguese machine tools in Chinese market.
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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1,6/1,6 cmExporting to China
SWOT Analysis: MouldsSWOT Analysis: Moulds
1. Strengths
a. High production capacity and ratio of moulds of large-scale, high-precision, complexity and long life duration
b. High application level of CAD/CAM/CAE technology including 3D design and 3D analysis during its forming process with the high-speed measuring technology and counter engineering as the back-up;
c. High application level of hot runner technology, air-aided injection forming technology, and high-pressure injection forming technology;
d. High standardization level of plastic mould and utilization rate for standard pieces;
e. Good quality moulds material and advanced surface dealing technology.
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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1,6/1,6 cmExporting to China
SWOT Analysis: MouldsSWOT Analysis: Moulds
2. Weaknesses
a. Almost invisible and unknown name of Portuguese moulds in Chinese market due to lack of long-term commitment and direct participation in the market;
b. Limited presence of Portuguese mould industry both in the professional fairs in China and in the market, providing local support;
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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1,6/1,6 cmExporting to China
SWOT Analysis: MouldsSWOT Analysis: Moulds
3. Opportunities
a. Great potential, as illustrated before, for the next decades;
b. Potential demanding for mould and plastic mould;
4. Threats
a. Fierce competition from: Chinese manufacturers in the low and medium class dies; Japanese/Taiwan in the medium and high range; Germany/Italy in the high range moulds.
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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1,6/1,6 cmExporting to China
Successful ExampleSuccessful Example
Joint Venture
One Top Cork Supplier from Portugal and the Nr.1 Winery in China
Reasons for Success (Portuguese Company)
• Winning a long-term big client;• Selling more cork to other clients in China;• Creating good image in China, taking advantage of the
strong brand name of the Chinese partner;• Taking control of core technology;• Natural industry / business / investment shift;• Successful investment.
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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1,6/1,6 cmExporting to China
Successful ExampleSuccessful Example
Reasons for Success (Chinese Company)
• Saving costs, compared with imported cork stoppers;
• High quality stoppers, compared with local stoppers processing factory;
• Supplying stoppers to other wineries;
• Part of the multi-sector investment strategy.
Reasons for Success (Joint Venture)
• Strong demand of high quality stoppers from Chinese wineries;
• Providing local-made good stoppers at competitive price;
• Strong demand from Nr.1 winery in China.
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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1,6/1,6 cmExporting to China
Unsuccessful ExampleUnsuccessful Example
Export to China
Portuguese Olive Oil Company
Portuguese manufacturer:
• Top brand olive oil producer;
• Global exporter;
• Excellent European brand.
Chinese buyer:• Nr.1 shopping center in Beijing (maybe in China);
• Top brand image sense among Chinese consumers;
• Good distribution network.
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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Unsuccessful ExampleUnsuccessful Example
Reasons for “Divorce”
• No market support to Chinese buyer;
• Never visited China (requested by the buyer several times);
• Waiting at home for the orders (1st order is done at the initial visit of buyer to Portuguese supplier);
• Slow response for the daily email/fax communication;
• No reply to the proposal from buyer for further business development.
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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1,6/1,6 cmExporting to China
Unsuccessful ExampleUnsuccessful Example
Current Situation
• Chinese buyer, decided not to work with Portuguese supplier;
• Chinese buyer is now working with Spanish olive oils and they are having extreme success;
• Portuguese olive oil company has not yet realized it lost one of the most important markets and huge profits.
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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Business Culture: Barriers and RealityBusiness Culture: Barriers and Reality
• Most Chinese companies/people do not know Portugal;
• Portuguese products are not yet known in China;
• Many Chinese companies do not speak English or Portuguese;
• Strong market support is highly expected from Chinese buyers when negotiating;
• Some P.R. activities are necessary as there are too many suppliers, both domestic and abroad;
• Chinese distributors & consumers attach great importance to the brand name.
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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1,6/1,6 cmExporting to China
Practical Advice for Portuguese CompaniesPractical Advice for Portuguese Companies
Short-Term
• Considering Chinese market as priority export market;
• No sow, no reap; Chinese market needs your “investment” by all means, a gradual step;
• Selling Portuguese edging products, unique and competitive (unique means both attractive and meet local taste; competitive means both price and quality compared with Chinese and other foreign competitors);
• Frequent promotions and gradually build your own image;
• Work closely with your Chinese partners;
• Finding a good local partner and obtaining their best cooperation by supplying the best offer.
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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Practical Advice for Portuguese CompaniesPractical Advice for Portuguese Companies
Mid-Term
• Market segmentation and development based on the principle of appropriate market research;
• Fostering your own brand name in China by frequent participating in local and nationwide affairs thus creating a sound image;
• Working closely with your Chinese partner and supporting promotions; have your own presence increasing gradually (local representative office, e.g.).
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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Practical Advice for Portuguese CompaniesPractical Advice for Portuguese Companies
Long-Term
• China is a place for the long-term commitment, devotion, gradual evolution and eventual success, not for short-term speculation.
• Study it carefully all the time and practice, adapt to it (localization) and make innovation (internationalization).
• Money, Time, Patience and Relation.
• Flexible small & medium enterprises with specialties.
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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Buying Buying
from Chinafrom China
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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Why purchasing from ChinaWhy purchasing from China
1. China becomes a world leading manufacturing base
2. Supplying quality products with competitive price
3. Wide application of OEM mode
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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What to purchaseWhat to purchase
1. Various commodities;
2. Agriculture & garden tools and appliances: sprayer, pump, motor and other electric farm and garden appliances.
3. Gifts, toys, handcrafts, shoes, bags, etc.
4. Textile products;
5. Tools and small hardware;
There are many more…
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Difficulties & BarriersDifficulties & Barriers
1. Risk always exists for int´l business, either quality, credit, payment problem;
2. Communication is difficult: a different language; emails do not work effectively; contacts are mostly done through phone and meetings;
3. More time consuming;
4. Travelling to China without local support (local staff speaking Chinese) would be extremely difficult, for both meetings and logistics;
5. Cultural difference plays an important influence on the success of the business meetings.
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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1,6/1,6 cmSPI Services
SPI ChinaSPI China
Services and Business ScopeServices and Business Scope
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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1,6/1,6 cmSPI Services
SPI ChinaSPI China
• Market Assessments
• Building Partnerships
• Local Representation
• Promotional activities
• Organization and support of missions to China
• Creation of representative offices/subsidiary
Chinese Market: Opportunities for Portuguese CompaniesNovember 04
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1,6/1,6 cmSPI Services
MUITO OBRIGADO!MUITO OBRIGADO!
Chinese Market: Opportunities for Portuguese CompaniesNovember 04