TRADE FOR THE RIGHT REASONS
Written on the 19 November 2012
BEFORE heading to Asia, it’s a good idea to work out exactly why your business is going there.
Businesses need to understand the markets they are entering in Asia and how their products or services fit and engage with corporate advisors and governments in each country.
That’s the advice from partners Dennis Lin and Cameron MacMillan (both pictured), from BDO consultancy. They deal with many clients doing business across the Asian region.
“Businesses need to understand what they are going to Asia for: To sell, buy or create a partnership," says MacMillan.
“You cannot treat it as a gold rush and expect opportunities to appear. You must have patience and not bet the house on Asia,” he says.
Lin believes the recent bribery convictions in China of businessmen Stern Hu and Matthew Ng highlight the importance of treading warily when doing business in a foreign country.
He says it can be a mistake to try and act like a local.
“It is easy to get into trouble if one offends a government official," he says.
MacMillan and Lin believe technology and creative industries can grow faster in some Asian markets, where there are not the capital constraints and high labour costs of operating in Australia.
As an example he cites the success enjoyed by a number of Queensland logistics and food testers who were approached by Chinese authorities following a string of tainted food scandals there.
“They were approached because Australia has one of the world’s highest standards of food safety,” he says.
“In Japan there is still talk about the fall-out from the 2011 tsunami and whether food is safe to eat. People often take for granted that our food is safe, but not everyone can.”
The Japanese Government has encouraged entrepreneurs to produce goods, such as wagyu beef and automobiles, outside of Japan for the purpose of importing back to the island.
“Australia can be used as a base to manufacture products for Japanese tastes with traditional quality controls and a perceived quality of being made by Japan. The Japanese could not otherwise create the same volume of wagyu as they do not have the same amount of land. They are now looking at [offshore] rice production,” says Lin.