Friday, November 17, 2017
Selling in China
A big moment for me was when a charming Chinese woman approached me in New Zealand to sign her Chinese language copy of Tupaia.
Years ago, the big dream for a Kiwi author was to sell in the United States. It is still a staple market -- but how long is that going to last?
In August, we were on a small cruise ship out of Bora Bora, in the Tahitian Islands, when an American asked the lecturer, "What kind of impact is China having in the Pacific?"
The audience was mostly American, most of them business people, so you can imagine the massed intake of breath when the lecturer said, "Huge."
I can attest to that myself. The flow of Chinese investment in the Pacific is breathtaking. The islands are experiencing a boom like never before. Hotels, roads, office buildings are sprouting on palm-shaded beaches, all with Chinese signs. The Chinese love the Pacific, and, increasingly, businesses in the Pacific are selling aggressively in Chinese markets.
Interestingly, today there was a news item in our local paper about Chinese entrepreneurs selling cheap red wine under the prestigious Penfolds label. As the Sydney Morning Herald reported, it is not a small operation. Shanghai police have seized 14,000 bottles of fake Penfolds wine being sold by counterfeiters in China.The fake Penfolds wine was being sold through Alibaba's online flea market Taobao, as well as pubs and karaoke bars.
The three-month investigation followed a complaint to Alibaba by Australian wine company Treasury Wine Estates that suspicious retailers were charging "extraordinarily low prices" for Penfolds wine in its fastest growing market. Alibaba called in police, who said at a press conference on Wednesday that 13 suspects had been detained, including Mr Dai, a wine dealer who was selling fake Penfolds for 200 yuan ($40) per bottle online, while it should retail for 600 to 3000 yuan ($120 to $595).
That is a breathtaking price! In New Zealand one can buy a case of very nice Penfolds wine for about the same money. No wonder Mr Dai was tempted to stage the scam -- and no wonder Australian and New Zealand winemakers are marketing in China. Demand there increased by 33% last year.
And it is not just wine. A Shanghai-based marketing consultant, Matthew McKenzie, turned a local breakfast food, "Weet-Bix" into a hit in China, Our local Weet-Bix manufacturer, Sanitarium, sends 125,000 boxes of the breakfast food to China every month, and expects the craze to escalate -- Chinese will shell out as much as $50 for a box that costs us about six.
"There are fake products in every channel," said McKenzie -- from dishwashing liquid to infant formula. But the market had to be established in the first place, and it seems that Australian and New Zealand businesses are doing that very well.
America might sell planes and armament, and brag about "the art of the deal," but it seems that the Pacific is quietly taking over in the family homes of China. And that includes books. In 2015, at the Beijing Book Fair, 40% of the sales were acquisitions from abroad -- and the rate is increasing. There are problems for the Indie author, though. Print books must have a government-issued ISBN. Digital books sell for about a fifth of what they fetch on Amazon.com. And, as with the wine, there is the problem of piracy. But the market is huge, well worth exploring.
And it seems that it is the way of the future.