owed by forays into Japan and South Korea around the same time,” Andy Chen, Comvita’s CEO of Asia Pacific, told Inside Retail. “I joined the business two years ago, and now we are trying to leverage our capability and resources out of the greater China segment for total Asia, for the honey industry we are the market leader.” According to Chen, the sheer size of the population in mainland China means that after a decade, it has naturally become their single biggest market globally.  He noted that the company is the biggest and most mature player across the region, and last year, the business extended its focus to Southeast Asia.  “We have seen exponential growth in the last two years, as shown by our annual results which will be reported at the end of August.” Oftentimes, the company needed a local partner at the beginning of their forays into Asian markets, especially in the Singapore and Malaysia marketplaces. But now in Japan and China, the businesses are 100 per cent  Comvita-owned subsidiaries.” Engaging the Chinese consumer According to Chen, from a cultural standpoint, Chinese consumers and people from other parts of Asia firmly believe in the health benefits of honey. They also appreciate that the honey is sourced from New Zealand and believe in its integrity and quality. “In mainland China and Hong Kong, consumers are also aware of the UMF quality mark of mānuka honey,” said Chen. The Unique Mānuka Factor (UMF) is a quality assurance system of that specific type of honey from New Zealand, designed to validate its potency, authenticity, shelf life and freshness. According to Chen, although there are a number of smaller players that consumers may sometimes want to try, when it comes to premium honey, Comvita has a proven track record for quality and its customers have confidence in the brand.  “For example, when they pick honey for gifting purposes only Comvita is perceived as gift-worthy, both in terms of price and sincerity,” he claimed. Chen noted that the company is working on localising its products in China, too. The brand launched collagen drinks with honey back in April this year, and it’s been hugely successful and popular among female consumers. “This is a perfect formula because the collagen peptides are good for your skin and the mānuka honey is good for your gut health.” A plan of attack According to Chen, there are three channels into the Chinese market. The biggest one is domestic trade, second is the official cross-border trade and third, but is the daigou market.  The daigou trade refers to Chinese expatriates purchasing products from overseas (in this case, New Zealand) and shipping them back to consumers in China. Chen believes that this adds a layer of sophistication to the overall operations of the brand in the country. “Our team on the ground is looking after domestic trade and cross border while a team in New Zealand and Australia looks after the daigou market,” he said. “We make sure our business strategies are all mapped out against these three channels so then we can make them complementary, instead of cannibalising each other, which happens quite often to many international businesses.” Nuances matter When it came to the packaging and distribution considerations for the Chinese market, the brand made some calculated changes to suit local cultural sensibilities. There were several key considerations, first and foremost, was the colour. While black is a national colour in New Zealand, it is not necessarily the best colour in Chinese culture. “The colour black is traditionally associated with death, but it really depends which segment you are playing in,” Chen noted. For products aimed at the older demographic, the brand uses red and yellow which symbolises happiness, good fortune and prosperity, but black is used for niche products for younger consumers. “The ease of use is very important too. Our team on the ground in China, who really understand the local consumers, recommended we upgrade our UMF5+ travel pack to a snap pack,” said Chen. “We then launched a second SKU of the travel pack for UMF15+ with lots of in-depth consumer insights. That was another huge success of a localised product.” Challenges abound International expansion can always be tricky, as each market tends to have their own unique industry regulations, which can be quite inconsistent. Interestingly, Chen mentioned that there are many fake mānuka honey brands in the Chiese market, allegedly from Australia. These products are often cheaper, but not authentic versions of mānuka honey. According to Chen, Comvita is the only brand that has the full supply process from their trees, the bees, the lab and their factory. This is of course in addition to the simple fact that they are the only brand offering genuine mānuka honey. “Different product quality can cause us trouble, and last year both Chinese and Japanese customers had to issue a warning letter to the Ministry of Primary Industries here about substandard quality honeys from the other New Zealand companies.” The sheer size of the Chinese marketplace can cause many foreign businesses to “struggle to get over the hill”, and Chen feels that most companies from Australia and New Zealand are not fully prepared when they go to China. “They need to understand the local market and local consumers. Nowadays, telling the same old stories like ‘We are from pure New Zealand’ doesn’t work anymore,” he warned. Authenticity is key Chen explained that products from Europe and South America are flocking the Chinese market, claiming to “be pure and clean”, especially dairy products from Germany and the Netherlands. “Companies need to take one step further and confidently talk about environmental and social issues and how they are addressing that here in New Zealand – be specific – and explain the commitment of your business,” Chen advised. Premium consumers in the Chinese marketplace are looking for authenticity. “For example, at Comvita we talk about how we are saving billions of bees every year and the environmental reasons for us to have our own forestry. So, specific and genuine messages about your business practices will resonate with premium consumers in the Chinese market.” Chen is of the opinion that most businesses from Australia and New Zealand will be better served to play in the premium segment, as consumers are well educated and appreciate responsible business practices. The DTC vision The pandemic has of course accelerated digital transformation across the globe, and Comvita has also moved with the tide. Chen said that the company views itself as more of a consumer brand rather than a wholesaler or manufacturer, especially in China and Hong Kong. He noted that when customers see the brand’s logo, they see a natural health brand. “We have been working really hard on direct to consumer (DTC) across different channels in the China and Asia markets. In our China market, our DTC is more than 70 per cent.” While the company has weathered many storms during the last two and half years, the early preparations and reinforcements of their DTC channels in the marketplace has really helped them to gain market share. “In mainland China we have a team of 200 people on the ground, both online and offline. Any successful business needs to be fully prepared and invested confidently,” he added. An end-to-end brand experience Closer to home in Auckland, Comvita made quite an impression last year with the launch of its immersive customer experience centre, the Wellness Lab, where customers are invited into the lives of bees through a sensorial 45-minute honey tasting journey, partnered with custom-designed audios and visuals displayed in a 180-degree theatre. “The Wellness Lab is part of what we call the ‘win at home’ strategy. After two years of success in the international market, now it’s time for us to reinforce our strong hold in the home market,” Chen said. “The Wellness Lab continues to advocate for a natural and healthy lifestyle through our signature tasting sessions and design excellence. We want to take the Wellness Lab to our international consumers too.” Chen reveals that Shanghai, North America would be the first targets, and eventually all of its major markets in the next five years. “When international visitors come to New Zealand we want to create a ‘wow’ effect with an uplifted, end-to-end brand experience.” The brand is also currently working with Cathay Pacific in Hong Kong and Asiana Airlines in Korea for inflight shopping. “We’ll then have a presence at Auckland Airport and around the city with the Wellness Lab. We are even thinking about a Comvita wellness retreat to enable visitors to see our forestry and beekeeping operations,” said Chen.