12 Nov BREAKING INTO CHINA
Yesterday, the world’s largest online retail event – 11/11 or Singles’ Day – kicked off in China, smashing previous records with sales of $38.3 billion, up 26% on 2018. $1 billion was sold in the first minute.
Given the sheer scale of the Chinese market, a burgeoning middle class and a particular interest in high quality Australian-made products, there is no doubt about the potential the Chinese market holds for export opportunities for Australians brands. However, the market is notoriously opaque with changing laws and a fragmented diagou network buying products in Australia and selling them to their family and friends in China.
That is why having a strong partner with a track record of success is key. Yesterday, McPherson’s Limited (ASX: MCP) announced that it (took out word) secured a formal JV with Chinese distributor Access Brand Management (ABM), to expand sales of its Dr LeWinn’s branded products in Greater China.
Through McPherson’s partnership with ABM, sales revenue for Dr LeWinn’s products in China has increased from $400,000 in FY17 to $16.7 million in FY19.
By formalising the partnership in a JV, McPherson’s and ABM now have more than just a distribution agreement. By knowledge sharing, investing in R&D and marketing, McPherson’s and ABM are well placed to achieve their initial goal of $25 million sales of Dr LeWinn’s products in China FY20 with even greater ambitions over the next few years. And therein lies the power of relationships.