Together exporters achieve more

Rod MacKenzie’s seen how tough export markets are for fledgling Kiwi exporters, and is calling for greater collaboration.

Standing at a trade show in Shanghai recently I found myself wondering, not for the first time, how a typical New Zealand SME could possibly hope to succeed in this or any other major export market.

The mere act of being at a trade show, particularly with a stand worthy of the quality of the products you’re selling, can be daunting enough. The preparation, research, organization and delivery of a decent presence at a show such as Food & Hotel China requires months of planning and a substantial financial commitment. Many, if not most, SMEs would find it prohibitive.

Then there’s the art of making sense of the chaotic mass of people pushing and shoving their way around the exhibition. Sorting out the sheep from the goats, the customers from the crooks, and picking those very few with any real intent to do business requires local knowledge and language skills that, again, can be very hard to come by in New Zealand.

And that’s just a trade show. Developing a proper market strategy with potentially complex channel structures; finding and managing the right in-market partners and building sales momentum require a massive amount of focus and resource.

The amount of effort that value-added exporting requires is no small thing for a typical non-primary sector Kiwi enterprise.

That New Zealanders succeed at anything other than simply flogging commodities is something of a modern-day wonder. The bald truth about China and other parts of Asia, however, is that very few do succeed. The bulk of New Zealand’s trading relationship with China, for example, effectively boils down to milk powder, logs, wool and meat.

There have been numerous efforts over the years to support New Zealand companies, particularly SMEs, to get them further up the international value chain. In the 1990s Trade NZ (NZTE as it is today) worked intensely on facilitating collaboration between exporters with common interests. Years of supporting these ‘Joint Action Groups’ across different sectors resulted in them being renamed (privately) ‘Disjointed Espionage Groups’. The reason many companies were participating in them was simply to find out what others were doing and target their customers. Virtually none of the JAGs survived beyond the end of the millennium.

With the advent of Industry New Zealand in the early 2000s, support came in the form of small cash grants (‘Going offshore? Here’s $10,000 so long as you do something resembling international business’). Aside from the futility of a scheme of this nature an intriguing aspect was that it proved to be very difficult to give the annual allocation of money away, resulting in the bizarre sight of public servants begging companies to take money!

As New Zealand confronts more complex and diverse export markets the need for support for SMEs has never been greater. Government, via NZTE, has resorted to large cash grants to only a select few and is now revisiting the concept of collaboration (artfully renamed ‘coalitions’). But there’s little sign that much has changed in the attitude of exporters.

There are few examples of Kiwi companies cooperating in international markets, and yet there are many role models from other countries that would suggest it’s worth a go. There is the newly formed Primary Sector group establishing itself in Shanghai – but this is a loosely formed association of companies operating in significantly different sectors within China. Plus it comes hard on the heels of the Greenshell Mussel consortium in the same city collapsing.

For SMEs looking to tackle export markets and push their products up the international value chain some form of arranged collaboration seems an obvious and straightforward strategy. Whether it’s Government-led, arranged through business associations, or simply as a result of networking, its time to stop being a nation of rugged individualists. It’s time to work together and stop regarding other New Zealand companies as competitors.