Presented by: SMH International
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Transcript of Presented by: SMH International
Presented by: SMH International
China Initiative 2012China Initiative 2012SUSTA State Fall MeetingSUSTA State Fall Meeting
December 1, 2011 @ OklahomaDecember 1, 2011 @ Oklahoma
PART IPART I China Market OverviewChina Market Overview
China Market Overview - Economy
Economy output: USD 5.01 trillion
(Jan. – Sept., 2011) Conservative but stable growth CPI: 6.1% (Sept., 2011)
14.3% (food category)
Sales of consumer commodities:USD 2.04 trillion (Jan. – Sept., 2011)
Retail: 17%HRI: 16.7%
China Market Overview - Trading
China Import & Export Value (Jan. 08 China Import & Export Value (Jan. 08 –– Sept. 11) Sept. 11)(USD Billion)(USD Billion)
In 2009, China trading value was largely affected by the economic recession. Starting from late 2010, resilience was witnessed. Total import value: USD 1.29 trillion (Jan. – Sept., 2011)
26.7%
China Market Overview - Trading
U.S. continued to be the 2nd largest trading partner of China.
Stable share by trading value Vibrant performance from
emerging suppliersAustralia 38.3%Brazil 38.3%HK 32.9%
ASEAN surpassed Japan to gain the 3rd place in bilateral trading with China. Challenge: FTA (Free Trading Agreement)
ASEAN: ZERO tariff for 10 countries Chile: gradually lower the tariff to reach ZERO by 2015
China Market Overview – U.S. Trading
Export value is continually on the rise with acceleration.
2010 export value from U.S. to China achieved record high of USD 19.42 billion, a 36.3% growth.
The first 9 months of 2011 saw a total export value of USD 13.56 billion, higher than the scale of whole year in 2008.
China Market Overview – U.S. Trading
TOP 10 U.S. Consumer Oriented Product Category
USD Million Change2009 2010
Dairy Products 136.9 236.7 73%
Processed Fruit & Vegetables 130.5 166.3 27%
Tree Nuts 142.7 144.7 1%
Red Meats, FR/CH/FR 41.4 137.4 232%
Poultry Meat 400.9 102.2 -74%
Fresh Fruit 55.4 80 45%
Red Meats, Prep/Pres 25.4 58.2 129%
Snack Foods 23.9 35.3 48%
Wine and Beer 25 35 40%
Fruit & Vegetable Juices 16.7 15.6 -6%
PART IIPART II Export to ChinaExport to China
Export to China – Major Ports
Coast Line: 32,000 km World Rank: 4th Regional Key Ports:
Northern: Tianjin Eastern: Shanghai & NingboSouthern: Guangzhou & YantianHong Kong
Regional ports also have their own regulations.
Export to China – Import Procedure
Export to China – Documents
Certificate of Origin
Health Certificate
Necessary documents for importation according to the requirement from Chinese laws and regulations
Commercial Invoice
Packing List Bill of Lading
Chinese Label
Document for
Clearance
Export to China – Label
• Name/Brand• Ingredient list• Net contents and drained
weight• Name and address of
manufacturer & distributor• Production date and/or
best before date + shelf life• Special storage conditions
(if applicable)• Warnings in relation to
consumption or storage (if applicable)
A Chinese label is compulsory for the Customs Clearance in China.
Label needs to be registered with CIQ
Both retail and bulk packages need to have Chinese labels on.
Latest regulation requires the Chinese label to be put on the products before shipment
Export to China – Health Certificate
Health certificate is most crucial for the clearance procedure in the Customs in China. For different products, different certificates are required:
Health certificate issued by the state department of agriculture, better from USDA
Ordinary Processed Food
Dairy and with Dairy Ingredient
Seafood
U.S. company must obtain certificate from USDA for dairy and any other containing dairy ingredients
A certificate from USDC is needed for any fish and seafood products exported to China.
Plant and Plant-originated
Phytosanitary certificate from USDA is required for any unprocessed plant or plant-originated products.
Export to China – Sensitive Item
OMineral Water
PoultryPork
U.S. Beef
Wine
No “Lean Meat Powder” like Ractopamine or Clenbuterol
A Certificate of Physical & Chemical Character
Anti-dumping charge by Chinese government
Banned
Invoice from Winery instead of Exporter etc.
Original Price
Dutiable Price
Mark-up
Transactional Price by the Contact
Plus: Cost of Freight, Packaging, Insurance etc.
Taxation
VAT: 13%/17%Tariff: M.F.N.
A 10% for Miscellaneous Cost during Procedure
Margin for DistributionImporter: 10% - 15%Sub-distributor: 20% - 30%Retailer: 30% - 35%
Export to China – Mark-up
U.S. enjoys the most-favored-nation (M.F.N) bound rate in trading with China.
A certificate of origin is required to enjoy this tariff.
Export to China – City of Focus
City GDP Growth (USD billion)1.Shanghai 256.4 9.9%2.Beijing 209.4 10.2%3.Guangzhou 161.2 11.0%4.Shenzhen 144.5 12.0%5.Suzhou 139.3 13.0%6.Tianjin 138.4 17.4%7.Chongqing 120 17.1%8.Hangzhou 90.4 12.0%9.Wuxi 87.5 13.1%10.Qingdao 86.1 16.0%11.Foshan 85.7 14.0%12.Wuhan 83.8 14.7%13.Chengdu 83.6 16.0%14.Dalian 78.3 15.2%15.Ningbo 77.9 12.4%
Market for Entrance:First-tier cities: Shanghai, Beijing, Guangzhou
Top 3 in GDP ranking- Consumer base- Early exposure- Mature market
Market for Expansion:Emerging second-tier, satellite and inland China cities
- Growing demand- Less explored - Purchasing power
Export to China – Retail Channel
36.52%Food continued to be the largest category during daily expenditure of urban families
China is predicted to be the 3rd largest retail market with a capacity of USD 2 trillion by 2025. Food forms a strong pillar in the expenditure continuously.
The retail channel in China tends to be mature and diversified:
Domestic players: supermarkets, hypermarkets, convenience store (regional coverage)International players: hypermarkets (scale of individual store, product variety)
Export to China – Retail Channel New operation: high-end gourmet stores
Existing players: City Shop, Ole’s, BHG Market Place, Jenny Lou’s, Jusco City Super, BLT and etc.
Advantage: self-owned import license source directly from overseas
easy access to the stores save margin from importers and distributors
Export to China – Foodservice Channel
Urbanization (over 50% urban residents in 2010) and a quicker life/work pace lead to more dinning out.
International events like Olympics and Expo boost foodservice development Over 18 years’ double digit growth rate generated sales of USD 327 billion in 2010.
Export to China – Foodservice Channel
More star-rated hotels and top restaurants Four & five-star hotels: 7.7% (2009) ===> 18.7% (2010)
Structure Optimization
Purchasing Strategy
Product Preferences
No import license, limited direct sourcing from overseas Require daily delivery of small quantities from local suppliers
International players: 30% - 50% imported items Imported category: meat, seafood, dairy, beverage and etc.
Export to China – Consumer Behavior
Safety
Price
Packaging
Novelty
Health
Awareness rises towards the healthy benefits of food items
58.4% of the consumers prefer novel items.
Food safety issue gains the public attention
Price-sensitive, but largely reduced.
Delicate, attractive
Consumer Behavior
PART IIIPART III Market Plan 2012Market Plan 2012
Market Plan 2012 – Trade Show
May 9 – 11, 2012 @ Shanghai
November 14 – 16, 2012@ Shanghai
Part BPart BSeafood ShowsSeafood Shows
November 6 – 8, 2012@ Dalian
September 11 – 13, 2012@ Hong Kong
Part A Part A Food and Beverage ShowsFood and Beverage Shows
China TradeshowsChina Tradeshows
Market Plan 2012 – Trade Mission
Venue: Hong Kong, Shenzhen & A Second-tier City Timeline: June, 2012
Market Plan 2012 – Retail Promotion
5-10 Stores Decoration & Demo
OpeningCeremony
Media PR
Authentic Southern U.S. Flavor
October 2011Chengdu/Ningbo
Interact with other events like SIAL and outbound trade mission
Buyer-seller introduction for product sourcing
Platform for the promotion of products sourced through SIAL and trade mission
Increase exposure of southern U.S. food products in China
Market Plan 2012 – HRI Campaign
Recommended menus from U.S. guest chef Buyer introduction and meeting
arrangement for U.S. product sourcing Menu promotion in designated restaurants
or cafés with unified decoration bearing U.S. identities
POSM design and production (menu, brochure, flyer, poster etc.)
Publicity through advertisement, media tasting/seminar, showcase etc. etc.
Onsite live demo and lecture given by Guest Chef from U.S. supported by SUSTA programs
January – December, 2012
China/HK
Market Plan 2012 – Market Report
3 reports according to requirement from companies/activity managers To provide a better understanding about the China market and the
marketability of products with trader referrals