SINGAPORE: Strong economic growth, open and transparent business environment, and affluent population eager to try the latest products, make the city state of Singapore a fertile market for New Zealand exporters. 

“Singapore is the size of Lake Taupo with a population of just 4.6 million and a GDP that is higher than most countries in the world,” says Grant McPherson New Zealand Trade and Enterprise’s regional director for South and South East Asia.

As an English speaking country, Singapore is often considered a relatively easy entry point and springboard into the rest of Asia’s fast growing markets, and there are significant opportunities for New Zealand companies within the South and South East Asia region.

“You have a growing middle class and increasing disposable incomes, which from a consumer product point of view, is very positive. Access to resources and capital goods is also high on the list of requirements for these emerging markets,” says McPherson.

Over the past three to five years, countries in the South and South East Asia region have risen from the turmoil that impacted this part of the world in the late 1990s and early part of this century: the Asian economic crisis, the SARS (Severe Acute Respiratory Syndrome) outbreak which curbed tourism and consumer spending, the threat of bird flu, and the bursting technology bubble.  

“As these countries emerge from these significant events we are seeing some incredible growth rates. In this region the average economy is increasing at about 6 percent per annum – and that’s the slowest,” says McPherson.

He says the challenge is that each of these markets are very different. Every market has different religions, languages and rule of law, and McPherson warns that New Zealanders need to understand these cultural differences and respect them. 

This said, New Zealand already has close economic relations with many countries in the South and South East Asia region. Formal bi-lateral trade agreements exist between New Zealand, Singapore and Thailand, and negotiations are taking place for a free trade agreement (FTA) with Malaysia.

Exploratory discussions are also under way for a trade agreement with India. If signed, the agreement will open up opportunities for more sophisticated commercial partnerships, particularly in the IT, services and investment areas.

Furthermore, negotiations for a free trade agreement between ASEAN (Association of South East Asian Nations), Australia and New Zealand are also well under way.

With the signing of and engagement in discussions around new FTAs, McPherson says NZTE has an even greater role to play in helping New Zealand firms enter and expand their business in the South and South East Asia region.

“In the market, as a government representative, NZTE is highly regarded in this part of the world. Our staff have extensive experience, market knowledge and networks.

“We can open doors to senior executives and government officials and access information more quickly and effectively than companies could usually achieve on their own.  In most cases we have very strong relationships with all the key players, not only commercial partners, but also market intelligence providers who are willing to share their knowledge with us,” he says.

NZTE has recently extended its Beachheads programme to South East Asia and India. The programme helps accelerate the development of high growth New Zealand firms and utilises the business networks NZTE has established in each region.  In South and South East Asia, this network includes accountants, financiers, tax consultants, market researchers, senior executives and recruitment agencies. All are independent third parties who want to go the extra mile for New Zealand and freely give their time.
 
“This network is incredibly important, and together with NZTE, can help companies not only successfully enter this region, but develop and implement an internationalisation strategy that will see them significantly grow their business into the future”, says McPherson.

McPherson also points out that it is critical for companies to identify where they should be targeting their product or service, and to consider the way they might enter the market before leaving New Zealand. This may take the form of a partnership model, exporting relationship or investment in the market. 

“Companies need to develop a robust business plan which includes understanding how you are going to get your product into the market, what your value proposition is and whether there are any hidden costs. It’s critical to understand where you are going to make your money.” says McPherson.

“It’s really about doing your homework around what markets you want to enter. Part of that is making sure you leverage all the available resources, including organisations like NZTE, so you don’t have to reinvent the wheel”.

One of the big mistakes New Zealand firms can make is underestimating the commitment required to enter the market in terms of travel, time and money and the resources needed to manage their operation at home, while senior executives are out of the country.

McPherson says that among these considerations, Brand New Zealand is another asset companies should be using to help achieve “cut-through” and take their product or service up the value chain. 

He says the Brand New Zealand values identified by NZTE and Tourism New Zealand are very powerful in the South and South East Asia region.

“New Zealand’s clean, green image and qualities such as resourcefulness and integrity resonate strongly and New Zealand companies are using that to their advantage.

“In this region, we put Brand New Zealand at the forefront of everything we do, from trade events and promotions, to the way we behave in our relationships. We’ve instilled in our team here that we are the guardians of the brand. One company not delivering or failing has a significant impact on the perception of New Zealand; therefore we are very conscious that we want all New Zealand companies to succeed.”

For more information contact Grant McPherson, regional director for South and South East Asia, NZTE, Singapore.

Contact NZTE's South and South East Asian regional office in Singapore. 

You can read more about the ‘Smart positioning in Asia’ in the August 2008 issue of Bright magazine.