First steps for a New Zealand brand going into China

A New Zealand founder comes back from a trade fair in Shanghai with a folder of business cards, three WeChat contacts and a strong impression that something should happen next. Within a month there is an enquiry from a would-be distributor, a suggestion to “start with a flagship store on Tmall”, and a consultant offering to register a company. Everyone has a next step. Almost nobody has asked what the business actually wants from China.

The order of operations matters more than the plan itself. In the work we do with New Zealand companies on both sides of that border, the engagements that go well tend to spend their first weeks on four questions — and the ones that go badly tend to skip straight to a partner search.

First question: is “China” the market you are thinking about?

China is not one market; it is a set of them, separated by city tier, by channel and by consumer. A product that works in Shanghai retail may be irrelevant in Chengdu wholesale. A distribution arrangement that suits a premium meat exporter tells you very little about what a skincare brand should do.

So the first cut is not “which agent”, it is: which city, which channel, which buyer, and what does that buyer compare you against? A New Zealand brand is rarely competing with another New Zealand brand. It is competing with a domestic product that is cheaper, faster, better marketed locally and available in two days. Until you can name that product, you are guessing.

Second question: does your advantage survive the border?

Most New Zealand businesses have a real edge at home — provenance, freshness, a founder story, service that answers the phone. Some of these travel. Some do not.

Clean provenance travels well into certain categories and is nearly worthless in others. “Small and personal” is an asset with boutique buyers and a liability with volume channels. Twenty-five years of local relationships mean a great deal if the Chinese side needs a trusted interpreter of New Zealand behaviour; they mean very little to a platform algorithm.

The practical test is uncomfortable but cheap: write down the two or three things that make you win in New Zealand, then ask, for each one, whether a Chinese buyer would pay for it — or merely find it charming. What is left after that filter is your actual product for China. It is almost always narrower than the catalogue.

Third question: who is going to do the work?

There are three broad ways in: sell to an importer and let them own the market; work through a partner who carries part of the load; or set up your own presence. They differ less in cost than in who carries what — inventory, registration and compliance, marketing spend, and the risk of the thing simply not happening.

Each model is legitimate. What fails is a mixture nobody wrote down: the brand assumes the distributor is building demand, the distributor assumes the brand is funding marketing, and both discover the gap only after the first container lands. Whatever route you pick, put on one page who does what, who pays for what, and what happens in month four if the numbers are not there.

Fourth question: what would make you stop?

This is the question that separates a decision from a hope. Before spending, define two or three conditions under which you would withdraw — a channel that has not reordered after two cycles, a partner who cannot produce the documentation you need, a market that turns out to want a product you do not make.

Deciding in advance that you will stop is not pessimism. It is what makes the first spend small enough to be survivable, and it is the difference between a market test and an expensive education. Sometimes the honest answer to all four questions is that China is not the next market. Reaching that conclusion for the cost of a few weeks of thinking is an excellent outcome.

A first step that is actually a first step

If you want to move this week, do not shop for agents. Answer these on one page:

• 01 Which single city and channel are we testing, and which local product are we up against?
• 02 Which of our advantages survives the border, in the buyer’s words?
• 03 Which of the three models are we using, and who pays for what?
• 04 What has to be true in three months for us to continue — and what happens if it is not?

That page is worth more than a distributor’s proposal, because it is the document you will use to judge every proposal that follows.

Twenty-five years of working across this border has taught us one unfashionable thing: China rewards preparation that looks slow and punishes enthusiasm that looks fast. The brands that do well are rarely the ones that moved first. They are the ones that knew what they were testing.

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MiDeer Consulting has advised New Zealand businesses on China market entry since 2001. If it would help to work through these four questions with someone who sits on both sides of the border, that conversation is worth having before you spend a dollar in China.

This Insight is analysis and opinion from MiDeer Consulting, written from work with New Zealand and Chinese businesses on both sides of the border. Client situations are described in anonymised form only; clients are named only where they have agreed to be named.

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