16 Jun 2015

Asian market opportunities being missed

3:08 pm on 16 June 2015

Research by New Zealand's Trade Commissioner in Vietnam suggests food and beverage exporters are missing out on opportunities in emerging Asian markets.

A market in the Cambodian capital of Phnom Penh.

A market in the Cambodian capital of Phnom Penh. Photo: AFP

Tony Martin said in his Massey University masters thesis New Zealand exporters favoured established markets in Asia such as Hong Kong and Singapore while ignoring the potential of emerging markets like Vietnam and Indonesia.

"One of the main reasons I've proposed is a concept called psychic distance, which relates to people's perceptions of language and culture and historical differences that make some countries more attractive than others when we look at exporting to them," he said.

"And Vietnam is a psychically distant market for New Zealand compared with say Singapore or Malaysia, which we see as being much closer, psychically. The standard psychically close markets, the Singapores, the Hong Kongs, they're fantastic markets because they're open markets, but that means that competition is absolutely fierce and to be able to get your product in there and stay in there, it's a challenge in itself.

"So for the emerging markets, where there's much less competition, they're not as favoured by competing countries that have similar products to us, if we can get a good headstart in product categories in areas where we are good at exporting and producing, then it stands us in good stead for a longer term return in these markets."

Mr Martin said business networks, New Zealand Trade and Enterprise and even foreign students could help exporters to gain a foothold in emerging markets.

"If you look at scale and options for longer-term growth in some of these bigger countries that we are not so familiar with but we can access connections and government-related organisations, they do offer some great opportunities for a big growing middle class that is going to have the money to spend on the types of high quality products that we produce."