Report on 116 th China Import and Export Fair (Canton Fair) held from 31 st October to 4 th November 2014 at Guangzhou, China

Transcription

1 Report on 116 th China Import and Export Fair (Canton Fair) held from 31 st October to 4 th November 2014 at Guangzhou, China Handloom Export Promotion Council organizes various trade fair participations around the globe for the benefit of the handloom industry i.e. for the member exporters of the council under the aegis of the O/o Development Commissioner of Handlooms & Textiles, Ministry of Textiles, Govt. of India with the financial aid from various schemes of Govt. of India. In this context, council organized participation in the 116 th China Import and Export Fair (Canton Fair) held from 31 st October to 4 th November 2014 at Guangzhou, China. The fair was organized at the China Import & Export Fair Complex, Guangzhou, which is a state of art trade center dedicated for conducting such events. This trade fair complex is unique with all amenities to cater the same. About the Country and the business location: China, officially the People's Republic of China, is a sovereign state located in East Asia. It is the world's most populous country, with an area of 96 lac sq.km. and a population of over 1.35 billion. The gross domestic product is about 9.24 trillion USD (2013) and GDP per capita is about USD (2013). As it has many territorial seas such as the Bohai Sea, the Yellow Sea, the East China Sea, and the South China Sea, the country has many major shipping ports which are an added advantage to improve their export and imports. Due to their drastic development in business; and GDP, value of their currency/monetary unit i.e. Renminbi/Yuan has appreciated very well against the global currencies. Being such a vast country, it has followed mainly Chinese language which of course would be a small constraint for an easy business dialogue in the present generation. Understanding China-Chinese Business Culture: 1

2 There is a phrase which goes "East is East and West is West". That is as true as now when it was first coined. There are signs, in many ways sad ones, that the gap between eastern and western cultures will become minimal within a generation or two. Chinese society is changing very fast, especially in the younger generation, who are increasingly integrating with the rest of the world. But right now, there is still a gap between the two cultures. However, contrary to a widespread perception, the Chinese are very easy to get to know. They are warm, generous, interesting, curious, wise and thoroughly rewarding people to have as friends and business contacts. However, the generally accepted rule of avoiding the topics of religion and politics do apply. No matter what preconceived ideas we in the west may have about Chinese politics, do not raise the issues of Taiwan or Tibet. It can only sour the atmosphere. To deal successfully with Chinese businesses demands an appreciation of the culture of China, in both the social and business settings. At the least, any foreign entrepreneur should make the effort to understand and respect the Chinese approach to business matters. The Chinese are a proud nation. Many business deals fail at the outset due to fundamental misunderstanding. The toughest aspect of understanding a people is to understand their ethics, values, etiquette and protocol. As outsiders, we miss the very subtle touch operating within a culture and often we do not clearly understand what influences and drives a successful business relationship. It may be argued that there is an equal onus on the Chinese business person to adapt to western ways. However, this is simply not going to happen in the short and medium term. Do it the Chinese way or be prepared for delays, disappointments, misunderstanding and, worst of all, mistrust. 2

3 China has a low wage, low price economy which is growing rapidly. Of course, it simultaneously creates profound challenges for the world. Most foreign businesses will feel the effect of this process in some way at some stage. But, the incentives are huge and the potential rewards make the effort worthwhile. And the effort required is not as daunting as it may appear. The paramount point to appreciate is that, although China may seem to be in a hurry, the Chinese business person is not. Patience really is a virtue. You will need time to build up a relationship with your potential partner. This relationship is called 'guanxi'. In the Chinese business world, guanxi describes the network of relationships among various parties that cooperate together and support one another. The Chinese businessperson's mentality is very much one of "You scratch my back, I will scratch yours". It boils down to exchanging favours, which are expected to be done regularly and voluntarily. Therefore, it is an important concept to understand if one is to function effectively in Chinese business` society. Regardless of business experiences in your home country, in China it is the right guanxi that makes all the difference in ensuring that business will be successful. By building the right relationships, you will minimize the risks, frustrations and disappointments that are inevitably possible in any such venture. Sometimes it is forging the right guanxi with the relevant authorities that will determine the long term competitive potential of doing business in China. That is why good relationships are so vital to any successful business strategy in China. Guanxi is probably the most important single asset of any foreign business in China. It takes time and effort to build such a relationship. Therefore, for most small and medium sized business, the recommended way for doing business in China is to set up a joint venture with a Chinese partner. By doing so, many of the cultural obstacles can be overcome with minimum frustration. The Chinese enterprise has the advantage of knowing the culture and procedures, while also being part of the guanxi network already. For the western business person, this means that it is only necessary to forge a trusting relationship with one Chinese contact. 3

4 This means, of course, developing a mutual trust. You need to be sure that you have selected the right partner in China. This needs a lot of research, and it may be advisable to seek the help of a qualified China business consultancy. A reputable consultancy will not only have an extensive network in China, but also be able to take away a lot of the worries about the culture and language gap. You may also have ethical concerns that you want considered. To anyone who has experienced the real China for themselves, it is clear that reporting in the western media has an unfair tendency to be largely negative. A more balanced approach would be beneficial all round. However, we cannot ignore the truth that there are unscrupulous employers who have a callous disregard for the welfare of the workers and for health and safety issues. In China, there are many employers who are concerned about maintaining a happy labour force, who work in safe and pleasant conditions. They realise that a contented workforce is more productive, and hence more profitable to them. When dealing with potential partners, just remember that China is expanding rapidly, but only at its own pace. The Chinese business person will not be hurried into an agreement. However, if you are prepared to understand and respect the business culture of China, you have a realistic chance of genuine success. But, if you are prepared to embrace the culture more fully, those chances increase manifold. An open mind will open negotiations, but an open heart will open doors. About the fair: China Import & Export Fair is being conducted for many years and has now crossed its 116th edition. The fair is jointly hosted by Ministry of Commerce of the People s Republic of China & Peoples Government of Guangdong Province. Being supported by Government, the infrastructure for the venue is in a superb facility, spread widely for many hectares. The venue, China Import and Export Fair Complex, is the added advantage for organizing this fair as we can say that 4

5 this venue is one of the best and biggest in the world. The exhibition area alone is spread to as huge as to about 2 million square meters. The organizer of the fair is China Foreign Trade Centre. This China Import & Export Fair otherwise known as Canton Fair is organized in 3 phases and twice a year. This edition is the 116th edition and was organized during the following dates: Phase 1 October 15-19th 2014 Phase 2 October 23-27th 2014 Phase 3 October 31 November 4th 2014 As this fair is covering more than 16 categories of products, cluster of categories are organized in 3 phases and our segment falls into the phase 3 and was organized in the venue i.e. China Import and Export Fair Complex. The Exhibition area for this edition was about 1.18 Million Sq.m and the total number of stands as a whole was about 60,222 in numbers. The fair is usually organized as national pavilion and international pavilion. All Chinese home businesses / entrepreneurs are allowed to exhibit in various halls of the national pavilion and other country businesses/entrepreneurs are demarked in international pavilion. The total business Turnover in National Pavilion is about Billion USD. There were 16 categories of products exhibited in 51 sections and there were about 24,751 exhibitors. International Pavilion: In specific to speak about the international pavilion, it was occupying about 20,000 sq.m. with totally 951 stands of 551 enterprises from 45 countries and regions forming 11 national and regional trade delegations. Overseas Buyers: The buyer count to this edition of fair was good with no drift from the earlier edition. It accounted to about 186,104 buyers from 211 countries and regions. The region-wise buyers who attended the fair are shown below: 5

6 Africa-8.08% Oceania-3.21% Asia-54.94% America-13.89% Europe-19.88% Top 10 Countries and regions from where the overseas buyers visited the fair were Hongkong, USA, Russia, India, Chinese Taiwan, Malaysia, Korea, Thailand, Japan and Indonesia. Likewise if we assess the Overseas Buyer Profile by categories, the following are the observations: Textiles & Garments 24.20% Gifts % Home Decorations 28.09% Consumer Goods % Electronics & Household electrical appliances 40.89% Canton Fair Design Awards: The Canton Fair organizers have also organized a design award forum in which the entrepreneurs can participate and exhibit their design/designer products and the best design product is selected from them. Since 2013, 723 exhibitors with 1170 exhibits participated in Canton Fair Design Awards (CF Awards) selection and 92 exhibits won the awards. Events: The organizers keep the fair active through the day by organizing various events during the fair days. About 10 Theme activities, 3 Design Promote Trade Matching meetings, 33 Design Forums are conducted. Mainly they have three forums which acts as briefed below: 6

7 Marketing Forum- Guidelines for home decorations sale Branding Forum- Brand Construction and service design brand building Design Forum- Match making between CCCMC and PDC (Canton Fair Product Design & Trade Promotion centre) designers. After the completion of this 116th edition of the Canton Fair, the organizers are already geared up for organizing the next edition i.e. 117th Canton Fair during the following dates at the same venue i.e. China Import & Export Fair Complex, No.180, Yuejiang Zhong Road, Guangzhou, China. Phase 1- April 15-19th 2015 Phase 2-April 23-27th 2015 Phase 3 May 1 5th 2015 The Home Textiles category is in Phase 3. About Our participation: Being China growing as one of the leading economy in the world and since we had a marginal entry in the market during the last year, as a continuous promotional aspect, this fair was organized for the second time. Like last year we had received response from 10 members and hence we have put up Indian Handloom pavilion with 11 stalls including 1 central promotional stall for HEPC. The following exporters have participated in the event. Sl. No. Company Name and address Space in Sq.m. Allotted Stand No. 1 The Handicrafts & Handlooms Exports Corporation 18 A-05 & A-06 of India Limited 2 K.U.M.Connection 9 B-20 7

8 3 Sahil International (PNP) 9 A-02 4 Homelines Textiles 9 A-03 5 Dream Collections 9 B-18 6 Rishi International 9 A-04 7 Vani Clothing Co. 9 B-21 8 S.R.Kumar Intl. 9 A-01 9 Hafizia Art & Crafts Pvt. Ltd. 9 B Sai Overseas 9 B Handloom Export Promotion Council 9 B-19 Total 108 HEPC have taken a central promotional stall of 9 sq.mtrs thus aggregating to 108 sq.mtrs. The products displayed by the members were mainly bath mats, rugs, kitchen linen, table linen, bed linen, shawls, stoles, throws, wall hangings, curtains etc. The Indian pavilion was located in the Hall 15.1 (International arena) of the fair ground. In order to facilitate the members during the fair, Council arranged for translators/hostess for assisting them in the trade related conversations who have very well uttered the best of their job. FIEO have also organized the participation for their member exporters in this fair. Observations at the fair ground: 8

9 On the startup day, the fair kicked off speedily as all our members received few enquiries within couple of hours. Buyer movement was good and it was a fine day for all the members. Shri. K.Nagaraj Naidu, Consul General, Guangzhou visited the fair on the first day. We had an elaborate discussion about the business with Chinese and their way to success etc. We also discussed about the IIH Fair 2015 and requested him to do the needful to mobilize buyers for the same. He had swiftly taken steps to discuss with the potential people. Shri.Suresh, Consul (Commercial), CGI Guangzhou accompanied him during the visit. They were taken to all the member stalls of HEPC and interacted with the entrepreneurs about the business in Canton. Further they also visited all other Indian stalls participated through FIEO. After taking a general round in the adjacent halls, we then moved to the Hall 10.2 International Pavilion to visit the other Indian stalls located there. He interacted with all representatives from Coir Board, FIEO, etc regarding the business aspects of China. During his visit many entrepreneurs established their concerns over the business with China and in particular, an entrepreneur also pleaded him to take up the issue to China Government about the duplicate-copy works of their Indian products by name Made in India done by Chinese manufacturers. On this point CG has told that according to Chinese law any manufacturer who register first with them will be awarded the name i.e. any phrase can be registered as a name as per the Chinese corporate law. Hence it will not be possible to fight as O/o CGI on this issue, but, however he also told that this can be faced by filing a case locally on the concerned opponent which will give a better result and for which the Consul can do the needful from their end. Like-wise many such interactions were made by CG and entrepreneurs at the fair venue. He offered lot of ideas to the entrepreneurs about doing successful business with China. After a full session of visit, CG and Consul departed. 9

10 The Second day of the fair also attracted good amount footfall to our member booths. Few members also had confirmed orders. Because of our location the very first hour of the day was our triumph hour of business when considered to the middle of the day. However we had visitor flow even until the end of the day The Third & fourth day of the fair went on smooth for our members with nominal footfall, enquiries and orders. During all these days I had met the fair authorities several times, i.e., Mr. Issac Deng, Project Manager and Ms.Wei Peng, CIEF Operation Department, China Import and Export Fair and discussed about our participation. During all these fair days, interaction with other Indian participants was made and few people have expressed their interest to participate through HEPC in the next edition. These are in addition to the existing member participation list who have not participated through us and readily expressed their interest to participate in the next edition i.e. 117 th Canton Fair and all preferred the same location as the results were better than in Hall No Fifth day of the fair was also good for our members. Few members were receiving enquiries even while closing time. The fair closed with the success note in our member s minds about this business trip. All over the fair days, mobilization of buyers was done and we had a nominal number of business cards with a request to follow up by mail for further process. About 20 business cards have been received and the buyers were from China and also other countries. About 329 buyers have visited our member stalls from countries like Algeria, Russia, Peru, Nigeria, Croatia, China, Sweden, South America, Europe etc. The 10

11 total trade enquiries generated for the member participants was to a tune of USD and the spot orders booked was to a tune of about USD The photographs of the trade fair with our members and during the visit of the CGI to our stall is placed below: x 11

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16 The trade fair participation was coordinated by Mr.M.Anandabalaji, Jr. Export Promotion Officer of the Council. 16