INTERNATIONAL MARKETING

BFREE ENTERING

CHINA

Ashley O’Sullivan

Aisling Donagh

Laura Reddy

INTRODUCTION TO CHINA

China is the world’s second largest economy.

It has a population of over 1,350,000,000 bn.

It is expected to be Ireland’s fourth biggest trading partner by 2030.

INTRODUCTION TO CHINA Chinese Business

culture is based on relationships.

It is a complex, long and slow process.

Chinese Business meetings are held over a Chinese banquet.

Chinese Business partners build their relationship by ‘Giving Face’.

INTRODUCTION TO CHINA Chinese Business’s like

good credentials from potential business partners.

Many SME’s have withdrawn from China because they tried to take it on as a whole.

Better to focus on Regions, Provinces and Cities.

There are First, Second and Third Tier Cities.

BFREE MARKET SELECTION CRITERIA

Health conscious and aspire to live a healthy lifestyle.

Relatively high population of celiac sufferers.

Large population with medium to high disposable incomes.

Demand for bread and baked products.

High level of supermarket shoppers that like ready to eat products.

Good relations between home and host Country.

POLITICAL ENVIRONMENT Xi Jinping is the

President.

Communist party is main political party.

Relative stability.

PHILOSOPHY AND ATTITUDE TOWARDS FOREIGN FIRMS

Communist Philosophy.

But not in all aspects of life.

Like western Brand but are still proud of there history and culture.

HOME AND HOST COUNTRY RELATIONSHIP

China and Ireland have a good relationship.

Strong links with education.

This is good for Business between the two country.

There are also strong Business links.

ECONOMIC MANAGEMENT

One of the biggest economic powers in the world.

Two systems of economic management.

In 2201 China joined the World Trade Organization. (WTO)

LEGAL ENVIRONMENT There are three types of Business Structures in

China and choosing the right one from the beginning is imperative.

1. Representative Office (RO) – Easy to operate and maintain, but are limited in operational scope. Can become very costly in the long-run. Taxed on Gross Expenditure.

2. Service Office (SO) – Easiest form of limited liability company to set up. Taxed on Profits.

3. Trading Company (TC) - This allows you to engage in importing and exporting activities as well as domestic distribution (i.e. retail, wholesale and franchising) in China.

TAX PROCEDURE

Corporate income tax (25%)

Withholding tax (20%) Value-added tax

(general tax-payer 17% and small taxpayer 3%)

Business tax (3-5%)

PRE-PACKAGED FOOD LABELLING IN CHINA

Food exports require a certificate which are issued by the Environmental Health Service of the HSE.

Nutritional labelling requirements in China are the same of that in Ireland.

The label will have to be transcribed into Chinese.

BFREE NUTRITIONAL INFORMATION

ADVERTISING RESTRICTIONS

Advertising must be truthful and accurate.

It cannot be harmful to minors etc.

All TV and Radio media is owned by the Government, which may present a challenge for Bfree.

SOCIO-CULTURAL Ethnic group:Han Chinese 92%

Religion:Buddhism

Language: Mandarin

SOCIO-CULTURAL

Education Compulsory Enhance worth and career

Relationships Family and friends Grouped Rely on for advice

EATING PATTERNS

Very important

3 meals a day

Good quality and healthy

Homemade

ATTITUDE TOWARDS BREAD

Not popular

Only for breakfast

Homemade

Bakery

BUYING BEHAVIOUR

78% of shoppers decide on a product in store

37% decide from promotion

22% stick to their original list before entering the store.

CHINA’S ECONOMIC ENVIRONMENT

China has experienced rapid Economic Growth in recent years.

China’s Economic Growth percentage was 7.7% in 2013.

China’s slowdown has been accompanied by a number of worrying facts such as; inflation pressure, booming house prices and increasing local Government debt.

CHINA’S ECONOMIC ENVIRONMENT

CHINA’S ECONOMIC ENVIRONMENT

GDP growth is averaging at about 10% a year (IRE 7.7%).

This has lifted 500 million people out of poverty.

China has an unemployment rate of 4.1% (Ireland’s 11%).

A labour force of 797.6 million.

Over 1 billion people within the working age of 15 to 64 years old.

CHINA’S ECONOMIC ENVIRONMENT

While economic growth is slowing down, people’s income is much higher now as a result.

Rural areas are developing more and more due to urbanisation.

The effects of this are resulting in peoples consumption increasing.

A lot of people in China are no longer hungry. Statistics show people rising out of poverty are

spending their new disposable income on food.

CHINA’S ECONOMIC ENVIRONMENT

Imports Exports

Worth 1.6 Trillion Oil, Fuel, Machinery,

Medical Equipment, and Motor Vehicles

South Korea 9.4% Japan 8.3% Taiwan 8% US 7.8% Australia 5% Germany 4.8%

Worth 1.7 Trillion Electrical goods, data

processing equipment, apparel, textiles, and radio/telephone handsets.

Hong Kong 17.4% US 16.7% Japan 6.8% South Korea 4.1%

TECHNOLOGICAL ENVIRONMENT

Marketing infrastructure Utilities needed

China has the highest number of internet users in the world.

People mostly use mobile and tablet devices.

All broadcast media is owned by the Communist party or government agency.

All foreign made TV programs must be approved.

BFree can be eaten fresh or toasted.

DEMOGRAPHIC ENVIRONMENT

Population of 1,367,040,000 compared to Ireland which is 4.59 million

Life expectancy of people in China is 75.5 years

Age DistributionYears % Years %

0-14 17.1 55-64 11.3

15-24 14.7 65+ 9.6

25-54 47.2

DEMOGRAPHIC ENVIRONMENT

Since 2013 China has relaxed the one child policy

Over 50% of Chinese people are living in urban channels

This is set to increase to 2.85% by 2015

RECOMMENDATIONS Bfree has a great opportunity within the

Chinese market as healthy living is on the rise.

BFree needs to build its credibility up before looking to enter China.

Bfree may need to alter its ingredients to suit the Chinese market, for example, adding in wheat but keeping its products Gluten Free.

RECOMMENDATIONS

Adapt product range: Bfree could have a range of products to target the freshly baked target audience wants

Focus on one region of China Market the products health benefits and

encourage word of mouth marketing among customers

In store marketing is crucial