Ministry to help further expand SMEs’ market base in China

Source From (The Star Online): http://biz.thestar.com.my/news/story.asp?file=/2012/5/14/business/11284678&sec=business

Published: on 14 May 2012
By LIZ LEE
lizlee@thestar.com.my

SHANGHAI: The Domestic Trade Cooperatives and Consumerism Ministry is looking to further expand the market base for Malaysian small and medium enterprises’ (SME) products into the China market, tapping onto the growing second-tier cities.

The ministry’s secretary-general Datuk Saripuddin Kasim said that it was a consideration now that the Taste of Malaysia programme has been introduced to first-tier cities like Beijing and Shanghai.

“We believe we have a great future here and expect to penetrate more markets perhaps, second-tier cities in China,” he said after launching the programme at a Tesco hypermarket in Shanghai, in collaboration with Tesco Stores Malaysia.

“This is the first programme we launched in Shanghai and the second in China. Last year we launched a similar programme in Beijing and had recorded an impressive performance,” he said, speaking on the reception of Malaysian products in Tesco Beijing since a year ago.

Sales of Malaysian products under Tesco Beijing had increased to an average monthly sales of RM25,000 from January to March this year, compared with RM6,000 from May to December last year.

“We quite understand the market in Beijing but need about six months to a year to understand the market in Shanghai,” he said, noting that 60 more products would hit the shelves of storews here over the next three months, in addition to the current 40.

Prior to the Shanghai launch, there were 16 stores in Beijing participated in the programme.
Among the Malaysian products that struck a fancy with Beijing locals are frozen durian, potato chips and jelly.

Last year, China superseded Singapore as Malaysia’s largest export market with export value reaching RM91.25bil. Malaysia, in turn, is China’s largest trading partner from the Asean region.

Saripuddin said that it was a challenge to enter the China market as there was a strict screening process before products could be approved.

“The SMEs’ interest is great. Through Tesco, there are already 1000 SMEs keen on marketing their products to China but after reviewing in Malaysia, we found only 60 ready to be marketed here,” he said.
“They must be ready in terms of technology, capacity, financing, food safety, packaging and many more. We have to grow and develop them before they are ready to enter this market,” he said.

The Taste of Malaysia programme, which promotes and markets Malaysia’s consumer products through hypermarkets and supermarkets abroad, was first launched in 2005 in Hong Kong.

Including the launch in Shanghai, 13 programmes have been launched in the “east” so far this year and there are three more to come before year-end. South Korea will in the books next year.

Over the years, the programme has reached Singapore, Jakarta, London, Paris, Tokyo and Dubai.