JOHN WHELAN: China in our hands as Irish exports hit heights

The trade balance is firmly in Ireland’s favour for the first time in decades, writes John Whelan    

As China has become one of the world’s dominant economic powers, desire for Irish goods has surged among the country’s growing number of affluent consumers.

A vast and rapidly expanding market — for everything from cheese to gin, pork to whiskey, baby food to clothing, contact lenses to hearing aids, heart stents to artificial hips and aircraft parts to computer parts — has resulted in Irish exports to China increasing by 35% in 2017 alone; the highest ever and over double the level 10 years ago.

According to the CSO, in the year to December 2017, Irish firms exported more than €5.6 billion worth of goods to China.

Ireland’s software firms and aircraft leasing companies also reaped an estimated €3.5bn in sales to China last year, bringing total exports to €9.1bn.

The phenomenal growth in both goods and services exports is all the more remarkable as it pushes the trade balance firmly in Ireland’s favour for the first time in decades.

Traditionally, Irish businesses imported large volumes of goods from China and still do. Imports into Ireland last year were €4.5bn on goods and an estimated €350m in services.

However, for the first time Irish exporters last year managed to out-sell their Chinese competitors. This resulted in €3.5bn worth of trade in Ireland’s favour; one of the highest and most advantageous we have globally.

It appears the long courting of Chinese leaders by the State agencies has finally paid off.

Traditionally, products pass through a chain of manufacturers, distributors and retailers before they reach consumers in China.

Today, the internet and social media have led to huge changes in the way businesses sell into China.

Bord Bia, which is encouraging Irish food and drink exporters to target the China market has said it is important initially “to develop a base of customers, or so-called seed users, who can spread the word about the product.”

Tmall, China’s largest business to consumer (B2C) platform owned by e-commerce conglomerate Alibaba, controls more than 50% of China’s B2C market share.

In 2013, Tmall launched Tmall Global — a cross-border, online platform that allows international brands and retailers to sell directly to Chinese consumers without having a physical presence in China.

Bord Bia actively engaged with TMall Global — which the agency sees as a new route to market for Irish exporters.

Bord Bia says that its WeChat account and TMall promotions will maximise the opportunities for Irish food companies through China’s fast growing online market by promoting the benefits of Irish food directly to Chinese consumers.

With Tmall Global, orders can be shipped directly from abroad and payments may be settled in the preferred currency.

The goods are sent directly to China by consolidated shipment or express mail delivery, and distributed through Tmall bonded warehouses.

Tmall’s international cross-border drop shipping specialists ensure delivery to Chinese consumers within five to eight working days.

Registration on Tmall Global requires a one-off security deposit of $25,000 (€20,289).

In addition, there is an annual fee of $5,000 (€4,058) and a commission fee ranging from 0.5% to 5%, depending on the product category.

After signing up to Tmall Global, the foreign company must open an Alipay account to be able to receive payment. This will attract an additional 1% service fee for each real

John Whelan is a leading consultant in Irish and overseas trade



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