WRENELLE STANDER: Crafting a winning strategy for success in the Asian market

Unlocking success in the Asian market, especially China, demands a smart strategy that weaves together cultural smarts, tailored localisation, strong relationships, adaptability and a dash of sustainability. 

Recent economic vulnerabilities highlight the importance of diversifying export markets. To enhance economic resilience SA must not only enter new markets but also expand and consolidate its presence in existing ones. 

The success of entering and expanding in Asian markets, particularly China, requires a nuanced approach. Prioritising cultural fluency, sustainability, innovation and strategic partnerships is essential for businesses aiming to thrive in the dynamic and diverse Asian market.

Trade has been a linchpin for supporting both rural and urban communities in SA, bolstering incomes and creating jobs. Given its significance, it’s imperative that we maintain a steadfast focus on expanding our export markets. 

In particular, the agricultural sector, a cornerstone of the Western Cape economy, relies heavily on international trade to sustain farm profitability and spur job growth. About half of the country’s produce is designated for export, emphasising the importance of global markets for economic prosperity. 

However, recent economic challenges have emerged due to geopolitical tensions and an overreliance on a limited number of markets. Take, for example, a large chunk of our agricultural exports, which now go mainly to a handful of Asian countries and the EU. To boost our economic resilience it’s crucial that we embrace a strategy to diversify our export destinations. 

This strategy goes beyond just entering new markets; it involves both expanding into new territories and consolidating our presence in existing ones. The aim is to reduce our vulnerability to unexpected changes in trade terms and ensure a steady flow of export revenues. To achieve this, it’s crucial that we enhance the efficiency of our logistics, both for domestic transportation and exports. This becomes even more important as we strive to solidify our standing in current markets and smoothly venture into new ones. 

Despite challenges in SA’s ports, railway lines, and roads — as pointed out by Agricultural Business Chamber chief economist Wandile Sihlobo — it is important not to let logistical setbacks deter our efforts in export and international marketing. Instead, those responsible for logistics and infrastructure need to intensify their efforts to overcome existing obstacles (“Agricultural exports hit record despite logistical bars”, February 28). Simultaneously, trade and agricultural authorities should actively explore and open up new export markets, as rightly emphasised by Sihlobo. It’s a collective effort to ensure our economic growth improves and stays resilient. 

Wesgro, the agency tasked with promoting exports, facilitating trade deals for businesses in Cape Town and the Western Cape and nurturing exporter development, is doubling down on its efforts to open up new export avenues. Specifically, we are homing in on key Asian markets such as China, to maximise opportunities for local businesses. This involves participating in international trade missions, such as trade exhibitions and outward selling missions.

Throughout the year, Wesgro hosts a series of events aimed at promoting and developing Western Cape-based exporters. In addition, the organisation co-ordinates meetings and site visits for procurement teams from foreign companies interested in doing business with local producers and manufacturers. This proactive approach aligns with the broader goal of boosting economic growth and sustainability through diversified trade initiatives.

Asia’s allure — taking a closer look at China’s influence 

In today’s ever-changing global business landscape China stands out as a compelling combination of challenge and opportunity. China, being the world’s second most populous country after India and a rapidly expanding economic powerhouse, has consistently surpassed global GDP per capita growth since the late 1970s. This trend is also observed in other Asian economies. Impressively, annual gains have for the most part exceeded 5% since 2000, making the region an attractive prospect for businesses eyeing expansion. 

What further emphasises China’s importance in the global economic landscape is its role as the world's leading exporter of goods since 2007, and it holds the position of the second-largest importer globally, after the US.

China holds a pivotal position as a core market for the Western Cape, SA’s agricultural powerhouse responsible for more than 50% of the country’s primary agricultural exports. In 2023 China emerged as the top Asian export market for the province, with an export value totalling R16.1bn. The Asian region as a whole constitutes the third-largest export destination for the Western Cape, valued at R48.3bn and experiencing a remarkable 14% average annual growth from 2018 to 2023. 

On a national level SA’s exports to China have seen a significant surge, making it the largest export destination since 2009, reaching a high of R227.83bn in 2023. In addition, China stands out as one of SA’s major trading partners within the Brics bloc. 

Looking beyond China, Southeast Asian countries — collectively known as the Association of Southeast Asian Nations (ASEAN) — present substantial growth opportunities. Comprising Brunei Darussalam, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam, ASEAN has become one of the fastest-growing economic blocs globally.

With a combined GDP of $3.24-trillion and a population of 679.45-million people in 2022, the region’s urbanisation and rising nonfarm income levels offer promising avenues for the expansion of SA’s agricultural exports, creating a broader horizon for market diversification. 

Market entry and expansion

Now, the question arises: how can we optimise on opportunities in China and the broader Asian market? To thrive in the Asian market, especially in China, a nuanced approach is crucial, encompassing cultural, economic and regulatory factors. Businesses aiming for growth must prioritise cultural fluency, adaptation, innovation, partnerships and sustainability. Success depends on understanding diverse cultures, particularly in China, and tailoring strategies accordingly. This involves investing in cultural training, language proficiency and grasping local nuances. 

Navigating China’s regulations requires astute government relations and compliance strategies, a principle applicable across much of Asia. Embracing corporate social responsibility initiatives aligned with local values is increasingly vital, enhancing reputation and consumer resonance. Sustainability is paramount, especially given China’s commitments to reduce carbon intensity and expand renewable energy. 

Prioritising sustainability and corporate social responsibility resonates with environmentally conscious Asian consumers, enhancing success prospects. Succeeding in the Asian market, notably in China, demands a culturally attuned strategy emphasising innovation, adaptability, and understanding consumer preferences. 

Stander is CEO of Wesgro, the official agency for promoting trade and investment in Cape Town and the Western Cape.