Australian Companies see progress in China Market

A number of Australian International Marine Export Group (AIMEX) members exhibited at the recent China International Boat Show (CIBS) 8-11 April, several with their local distributor. Given the GFC and the slow down worldwide it was refreshing to feel the buzz of activity at this show. CIBS managed by Helena Goa, UBM Sinoexpo International Exhibition Company was as always run efficiently and effectively making life relatively simple for exhibitors.

The Italian and Australian pavilions were the only country pavilions at the show demonstrating that both these countries take this market seriously and are willing to invest the time and money for the opportunities starting to emerge. The show also once again had excellent and impressive representation from the SuperYacht sector with Australian boat builder Evolution Yachts having a very impressive stand amongst the key European and UK SuperYacht brands. A clear indication all the major players are taking this market seriously. Riviera was also showcasing the latest Riviera boats. Peter Welch at the show representing Riviera stated that the show this year was better than ever and he felt confident they would sell at least 1 boat from the show. They now have a new dealer who is taking a more proactive approach and has cemented the Riviera brand in this market. Australian product is well accepted in the China market for its quality, innovations and the skills and expertise of the Australian manufacturers.

Freight into China is often an issue and this time proved no exception with a couple of companies experiencing difficulties getting their goods passed customs.

MA Edwards CEO AIMEX said ¡°whilst the official freight forwarders are always expensive it is unfortunate that this seemed the only way to ensure your goods arrived at the stand, particularly at the moment with the world expo due to start in Shanghai. This can be a frustrating experience for many companies. It is about time show organizers placed more emphasis on supporting exhibitors by demanding better prices from their official freight forwarders rather than the monopoly position these companies tend to take.¡±

AIMEX have been organizing the Australian pavilion at this show with Austrade for 6 years and with initial expectations limited given the current economic situation all exhibitors were surprised and pleased to record either direct sales or potential sales coming from the first few days alone. The stream of visitors to this show in the past has been overwhelming but consisted of very few real buyers yet this time the numbers appeared less but the number of real buyers had increased. This was the consensus from all exhibitors spoken to both in the Australian pavilion and throughout the show.

Barry Jenkins representing Sanctuary Cove was overwhelmed with the number of Chinese companies inquiring about exhibiting at Sanctuary Cove. Whilst in the past Barry said he might have had 5-6 leads he basically spent the whole show with back to back people wanting to know about Australian boat shows and the industry there.

¡°This would have to be the most productive time I have had at this show ¡°stated Barry.

Todd Barr from Whitewater the Hong Kong based agent representing Aqualuma and Multipanel reported excellent inquiry for both products which are now well known brands in the China and Hong Kong markets. Barr whose company will only look at high end marine products said Asia is a very price sensitive market and dealing in high quality, high end products does have difficulties. You have to educate the buyer on the value they are actually getting. However once they buy they keep coming back as in fact the quality and innovations of these products speaks for itself. Multipanel as an example, once used by boat builders always results in the production process being far more effective and efficient thus producing improved quality and some significant savings.

Barr who has been in this market for 10 years was quick to mention the pitfalls you can face in this market emphasizing the need for new entrants to do in depth research and spend time talking to those in the industry who have succeeded. It is not like doing business in Australia, the culture, thinking process, time frames and motivations are different. He has learnt also from mistakes but appears now to have it right and is certainly proving that to his suppliers.

Richard Chapman from Coursemaster Autopilots and Hydrive a long time exhibitor at this show was quick to state this show was far better than last year. He said ¡°the fact that there are now Chinese boat builders exhibiting and trying hard to improve the quality of their product means they want to install quality products and our steering systems and autopilots are on their radar. I have experienced considerable enquiry. Maybe the time is now right to have a stronger presence here.¡±

China has recently been added to Bellingham Marine Australia¡¯s territory. But this market is not new to John Spragg who has been servicing this area for a number of years.

John said ¡°I must say it is changing and there is far more real businesses coming on stream. Exhibiting in the Australian pavilion for the first time Spragg felt motivated by the level of enquiry and had recently employed a project director to service the market in China and Hong Kong. Spragg said he had seen some mistakes made in China but it is now a more mature market and developers are starting to understand what marinas are really all about.

Paul Frampton representing Austral Propellers, VEEM and Marine Tech Industries said it was glaringly obvious after his second visit that you must keep coming to China to cement relationships. Paul had been invited to 3 boat building yards to showcase the Marine Tech pedestals as well as the Austral and Veem propellers. This is a great opportunity to supply into these boat builders in the early stages of their development.

Pyrotech Noise Control had an impressive stand in the Australian pavilion manned by their Chinese employees who had done a lot of preparatory work to ensure prospective customers came along to the show. Their early work did not go unrewarded as they dealt with a steady stream of buyers keen to know more about their product. Sales for this company are already steady and continue to grow in this market. George stated ¡°having a team of people on the ground with the sales skills and technical expertise certainly has given us an advantage. We are taking a long term view of this market.¡±

VEEM and Austral Propellers who have adopted a long strong strategy for this market expect to see enormous growth in this market over the next 5-10 years, however, having said that Paul stated that the sales and enquiries from this show more than cover any investments made to date and we are already benefiting from our continued presence in this market.

Also exhibiting at the show with their Chinese agents were John Hogan from Superior Jetties, Muir Winches and visiting the show following up on enquiries was Tim Withrington from ICIM.

With some of the main markets for Australian products being hit heavily by the GFC it is important to look at emerging markets such as China. The opportunities in the future will be enormous but unless you put the time and effort in now others will reap the benefit of this lucrative market. It needs to be said that the opportunities for equipment manufacturers are better at this stage of China¡¯s development than for boat builders. The demand for boats is still very slow and the views held are that exporters are still looking at 5 years for real demand to build.