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The one-child policy in China has also led to a high level of spending per child with an average of six adults purchasing for every new baby. Another factor which is driving the booming nursery industry in China is rapid urbanisation. Currently 51% of China’s population are living in towns and cities and this is expected to rise to 71% by 2020. Higher wages also mean that families living in towns aspire to better standards of living and part of this new culture is a growing desire for westernised products.
Athena explained that China has a poor reputation for product safety and because of this parents prefer to purchase European products. A prime example was the Chinese baby milk scandal in 2008 which has driven parents to source baby milk from Europe. British products in particular are perceived as being better quality and safer than equivalent items in China.
The immense size of China was also remarked upon and Athena explained that the country is in fact the size of an entire continent with 31 provinces, 653 cities and 2856 counties. Therefore, British companies wishing to export to China should prioritise and target the more affluent areas such as Shanghai, Beijing and Guangzhou first.
Interestingly, baby stores are still the primary place where people go to purchase baby products in China amounting to over 40% of the market with supermarkets at 27% and online sales just 18%. In 2011 there were 43,000 franchised baby stores in China with total revenue of USD 26 million. Department stores are very different to those in the UK and are not generally considered the best entry point to the Chinese market so British companies are advised to concentrate on targeting the independent baby stores. In addition, it is essential to use a China agent / distributor who has good knowledge of the market and possibly regional agent contacts too.
Elise Bertelsen of China Britain Business Council (CBBC) also attended the event and gave more important information, in particular about protecting your intellectual property. In China there is a ‘first-to-file’ system which means that even if your brand/patent is registered and recognised elsewhere, if a Chinese company has registered it in China, they will have the rights to it in this market. Trademark squatting – registering another’s name or mark with a bad faith intent to sell it back to the rightful owner for profit – is a particular problem in China due to this aspect of the Chinese system.
Finally, the BPA gave information regarding UKTi funding available to companies wishing to join the BPA’s UK Pavilion at CBME. There are individual grants available of £3,000 per company and also the possibility to access a further match-funded £3,000 via the UKTi Passport to Export scheme. More information about funding can be found HERE.