Category Archives: countries

The ultimate marketing plan for selling your food & beverage in China supermarkets

The ultimate marketing plan for selling your food & beverage in China supermarkets

China supermarket

How to get your food & beverage products in the China market? The key is to start in a few high-end supermarkets and position your product there in the right way. When the standard is set, you can move to more mid-range supermarkets with more reach.

Step 1: start with a brand and a clear origin

This approach applies to branded food & beverage products. Please note that a brand is nothing more than a way to recognise a product. So there is no need to be on par with Coca-cola or Magnum. But you will have to 'load' the brand in the right way for the China market. And this starts with a brand name that can also be pronounced easily in China and that has the right associations. It is an art in itself to come up with the right brand name.

Everything of your product that can be copied in China, eventually will be copied. The only thing that can't be copied is the origin of your product. So if it is German, stress this on your packaging an align with associations like quality and pureness. If it is French, ensure elegance and taste. Load your brand with elements that are associated by the Chinese with your country.

Step 2. Prepare

Not all products can be imported in China from all countries. Especially on fresh products there are many restrictions. Make sure that you are allowed to import your products into China and find a party who can do this for you, both in the beginning and on a larger scale.

Also check whether you are ready for China and be able to scale up dramatically. Otherwise you should set expectations from the beginning and confine yourself to for example one province.

Market entry into China is not cheap. You hardly have a chance of finding a distributor that takes all the risks for your product, especially not in the competitive F&B market. You will have to buy yourself in, pay listing fees. But the revenue may also be very big.

Step 3. Start high

The essence is to get your product positioned really high end. Perhaps even at prices five times what you would dare to ask in Europe or the USA. There are supermarket chains who focus purely on foreign products: BHG, OLE, Jenny Lou's, City Super, Corner's Deli. And yes, since the volumes then will be lower, you will have to buy yourself in on the shelves.

The positioning in these retail chains will not provide you a lot of turnover, but it will provide you with credibility. If you product is in OLE, then it must be good. And in the Chinese market, that is very much based on references and hearsay, this is essential.

Step 4. Slowly down the line

One your product is positioned, and you have generated some volume, got some word of mouth, it is time to enlarge the volumes. The next set of supermarkets to approach are the high-end chains: Sam's Club, Taste, Great, Treat, Bravo. Here you may have do discount a bit on your original price, do some promotions, and you will get a better feel of the market.

It is also the moment to review your physical distribution and to make choices where in China you want to be active.

Step 5. To the mass

Just keep in mind that China has over 5 times the population of the United States. Buying power may be less, but still it is a huge and developing market. This allows for a whole range of supermarket chains. This is the top-10:

  • Vanguard(华润万佳)
  • RT-Mart(大润发)
  • Wal-Mart(沃尔玛)
  • Lianhua(联华)
  • Carrefour(家乐福)
  • Yonghui(永辉)
  • Nonggongshang(农工商)
  • Bubugao(步步高)
  • Haihang Commercial(海航集团)
  • Wu-mart(物美)

With each of these supermarket chains you will have to negotiate and find your place. You most likely will have to pay listing fees, but given the fact that you have gone through step 3 and 4 you already should be able to predict the take-up of your product.

China retail

In parallel: online

There is a considerable number of online stores as well, but the list is dominated by Tmall and JD.com.

  • Tmall(Alibaba)  50%
  • JD.com   30%
  • Amazon China
  • Dangdang
  • 51nuy(YiXuan/Wechat owner)
  • Yihaodian
  • Vancl
  • Suning
  • Vipstore
  • Kmall

Having your product in one or more of these stores may look nice, but you will need promotion to become visible. You can buy favourable spots on these websites, but you can also use social media to promote you product further. In Chinese of course, and in the Chinese way.

How to get started?

Alliance experts can help you with the first steps into the huge China market. We understand that as long as volumes are still low, you will not open an office in China. We can act as your local representative and country manager, in close collaboration with your export manager.

For step 1 and 2 we can do market research and give you advice on your brand positioning.  From step 3 our activities will really kick-off, making use of our extensive network with supermarket purchasing managers.

We work with a team of people from Shenzhen, next to Hong Kong, where you can easily meet us if you want. The communication is facilitated by one of our colleagues who lives in or near your base country and who speaks your language. Our service fees start from around 10,000 USD, depending on what you want and how often you will need us.

Step 0: Contact us!

Feel free to contact one of our specialist in your country, or otherwise fill out our contact form. We will then bring you into contact with the most relevant colleague.

Contact me now!

 

This entry in Asia was updated on May 1, 2018 by specialist.

Business Opportunities in Vietnam for foreign companies

Business Opportunities in Vietnam for foreign companies

contract law in Vietnam

Vietnam is located in the center of South East Asia and is bordered by China to the north, Laos and Cambodia to the west.

Vietnam: a growing population with growing wealth

Vietnam’s population is ranked as the 14th most populous country in the world. With a large population of 93 million, half of which are under the age of thirty, Vietnam represents a huge pool of both potential customers and employees for many investors.

Continued strong economic growth, ongoing reform, dynamic environment, reflected in a young population, growing wealth, changing consumer attitudes - have combined to create a dynamic and quickly evolving commercial environment in Vietnam. Vietnam has been one of the fastest growing economies in Asia the past 30 years, bringing it from poverty to a lower middle income market.

Infrastructure investments, the manufacturing industry, the export sectors and newer consumer market in Vietnam present many opportunities.

Key export commodities of Vietnam

  • Telephones and their parts
  • Garment
  • Wood and wooden products
  • Seafood
  • Agriculture products such as Coffee, Rice, Cashew nuts
  • Transportation and parts

Key import commodities of Vietnam

  • Machinery, instruments, accessories
  • Plastic materials
  • Iron, steel
  • Petroleum oil, refined
  • Textiles, fabrics
  • Pharmaceutical products, medical devices

Vietnam's infrastructure and manpower costs

In terms of infrastructure, the Asian Development Bank (ADB) released figures in April 2017 that mark Vietnam’s public and private infrastructure investment as the highest in Southeast Asia.

With competitive manpower cost, Vietnam also considered as a sourcing hub (OEM), a new manufacturing alternative to China, India and other Asian countries.

Vietnam as a new market to enter

Vietnam is a country full of customers, competitors, and colleagues; it is also a long term market. Plan your establishment in phases, bring patience and develop a strategy for your entry and growth in Vietnam.

Regardless of the reasons for entry, identifying the right path into the local market can be challenging without local knowledge and experience.

Your steps to Vietnam market:

  1. Understand Vietnam opportunities
  2. See how Vietnam fits into your strategy
  3. Build Vietnam's strategy execution plans
  4. Invest in Vietnam competencies and people
  5. Invest in business relationships

Our local Alliance experts colleagues are happy to discuss with you and help to extend your business into the Vietnam market.

This entry in Asia was updated on December 4, 2017 by specialist.

The Iran cosmetics market: opportunities in the skincare industry

The Iran cosmetics market: opportunities in the skincare industry
Contract and negotiations in Iran


Iran is one of the leading cosmetic market in Middle East and Africa region, where is expected to be the fastest growing region during the next eight years.

Many Iranian women wear a make-up frequently which makes Iran a hot market for international cosmetics manufacturers. On the other hand the number of potential customers (women above 15 years old) is increasing year by year.

Consumption and market value

According to an open poll, conducted in 2015 of women who had a job, and were in the age of 15 or older, They would spend 30% percent of their income on cosmetics, toiletries and body care products. Besides, almost 4.5% of iranian family’s yearly income is spent on cosmetics and skin care products. This rate in Germany is 1.5%, 1.7% in England and France, and 3% in Italy, based on the Gallup Institute data. So, Iran spends 2 times more than Italy, and 3 times more than England and Germany on Cosmetics.

The cosmetics market value is estimated to be around $4 billion in 2016 according to Beauty world middle east, which makes Iran the #7 consumer of cosmetics and skin care products, in the world.

Iran cosmetics and skincare consumption

The table below, shows the amount of Iranian consumption, which indicates that it grows about 6% yearly.

year 2006 2007 2008 2009 2010 2011 2012 2013 2014
Billion $ 1,7 1,9 2,1 2,2 2,4 2,6 2,9 3,1 3,3

Nail polish and design products,are among the mostly imported cosmetics goods (based on the amount of Iran cosmetics import).

Iran cosmetics sources

As a country, consuming in this measure, it is performing poorly in Iran Cosmetics production sector; Iran produces only about 20% of the cosmetics, and a major part of the cosmetics and skin care products, are imported from UAE, Turkey and Iraq, through borders.

Drivers of growth for cosmetics and skincare in Iran

  • Increase on the number of women in workplace
  • Increase in the size of the urban population
  • Iran census 2016 shows that population of people older than 30 is growing which result in more demands in the skincare market
  • Expansion of new modern retailing channels such as hypermarkets
  • Lack of nutritions, air pollution and Increasing problem of early signs of aging is fueling the demand for cosmetic skin care products in Iran

Local production vs imports

In general we can say the following:

  • Bath and shower category products such as soap, shampoo are under dominant of domestic producers yet modern and high-tech products such as skincare and beauty are mostly imported.
  • Iranian consumers are mostly snobbish and prefer to buy European products however in recent years because of the lower purchasing power, consumers have moved toward less expensive products with reasonable quality from Asia (South Korea, India, etc.)
  • Rising demand for natural based products with better quality raises the chance of importation of quality brands

Prepare before you enter

Iran is a very big market for cosmetics but international cosmetics companies face different barriers when entering Iran. These can be high custom duties, tax, health certificates and registration bureaucracy.

Do market research first and only enter with a good local partner who can help you find the right distribution channels. 

This entry in Asia was updated on May 16, 2018 by specialist.

Export to China (and what do the Chinese import?)

Export to China (and what do the Chinese import?)

China distributor agent

China main economic facts

China is the world’s most inhabited country with a population of almost 1.4 billion and rising. The country’s disposable income per capita is around 7,000 USD. As costs of living are half of in the USA, the income corrected for buying power, the GPD ppp per capita, is around 14,000 USD>. This is the point where people can afford more than basic necessities, and be aware that there is an uneven income distribution in China. People in the cities on the East cost have much higher incomes than the people more in the East.

Massive migration to urban sections has caused rapid and widespread expansion. More than 100 Chinese cities hold excess to a million people each. The three most inhabited cities in China are Shanghai, Beijing and Chongqing. 54% of China’s population lives in urbanised areas. Urban living quarters are packed with people living wherever they can, including basements and shacks while the traffic in urban China moves in half the time that it does in New York.

China's main imports

The top import products of China are: crude petroleum, integrated circuits, iron ore, gold and cars. This top 5 is mainly dominated by the fact that China does not have big oil and gas reserves, nor iron mines, there is a lot of electronics manufacturing, and the mobility in the country is on the rise.

Who are China’s top import partners?

  • Japan (10%)
  • South Korea (9.3%)
  • Other Asian countries (8.1%)
  • United States (8%)
  • Germany (6%)

China’s Foreign and Free Trade Agreements

China’s Foreign Trade Law allows all kinds of enterprises including international companies to trade with China under a fairly liberalized system.

China holds special agreements with Hong Kong and Macau regarding economic activity and other partnerships. Its current Free Trade agreements are with the following countries:

  • Australia
  • New Zealand
  • Singapore
  • ASEAN
  • Costa Rica
  • Pakistan
  • Chile
  • Iceland
  • Switzerland
  • Korea

It is also negotiating FTA’s with the Gulf Cooperation Council, Norway, Sri Lanka, Japan and Korea.

How to import into China?

Though China’s import regulations and rules have eased up over the years, it’s still a complicated process. Working with a local agent or distributor who can also arrange import is the best option.

Permitted products are monitored by an Automatic Licensing System administered by the Ministry of Commerce. Products that are restricted require permits or licenses while some others, such as wastes or toxins, are banned. Inspection and certification processes in China are detailed and rigorous.

What are the import tariffs and taxes in China?

Most imports are charged 9.8% of the value of the goods as tariff charge. Value added tax (13% to 17%) is payable on certain items while consumption tax (1% to 40%) is added for products such as tobacco, liquor and cosmetics. Lower tariffs are levied on certain agricultural products such as wheat, sugar, wool, corn and rice.

Another important aspect is packaging and labeling, in which China has a few highly specific requirements. China’s booming consumer base, financially stable market and innovative approach make it a viable import destination but with some tricky procedures.

The Chinese market place and distribution channels

The Chinese market is a complex one and many players utilize a multi-distribution route for wider and better consumer accessibility. Its industry is characterized by a prominent services sector that operates in both the wholesale and retail sectors. Some retail brands have developed a wholesale distribution method in order to reach their customers quickly and easily. Apart from directly operated stores and franchisee ones, the warehouse style supermarket is a popular option in China.

Selling in China requires effort. Your potential distributors also want to see your market research and promotion plans. A local intermediary will help you with this. Also see our article How to make your company visible online in China?

This entry was posted in Asia on August 3, 2017 by specialist.

Tianjin Marine & High Tech Park – your base in China

Tianjin Marine & High Tech Park - your base in China

Tianjin

Tianjin Marine & High Tech Park (TMHT) is a business park with the focus on Marine service providers, especially in the high-tech area. The park has a special focus on internet technologies supporting the marine sector. The park covers 1,5 km2 with 800,000 m2 of office space. TMHT is part of Tianjin Binhai New Area, established in 1992, and currently hosting about 3000 companies, all together employing over 200,000 people.

The park aims to set up international collaboration and to attract foreign investments from Marine service providers, with preferably a focus on Internet technology. The senior management of the park has asked Alliance experts to assist in this process.

About Tianjin

Tianjin is one of the major cities of China, with a population of about 16 million people, located 100 km southeast of Beijing. It has its own international airport with direct flights to Tokyo, Bangkok and Singapore, and is only 1,5 hours drive from Beijing International Airport. Compared to Beijing, the city has more space, better air quality and lower costs of living. As many countries had an establishment in this ancient port city, there is a natural openness towards foreigners and an international cultural heritage.

Advantages of Tianjin Marine & High Tech Park

Firstly, TMHT has a very prominent status in the national strategy. Tianjin is the largest port and an important economic centre in North China and the internet industry in the Binhai New Area is booming. TMHT has been established to support this development, with around 100 million USD in funding. This status will ensure that the park will continue to grow and to attract new companies, thus creating a supportive ecosystem. At the opening of a new internet section in the park, directly 20 companies, with a joint value of about 1 billion USD, have become tenants.

Secondly, companies who register in TMHT will enjoy policy supports of different levels, i.e. national, Tianjin municipal, Binhai New Area’s, and TMHT. This support includes:

  • Specialized funding to support projects,
  • Strengthening market players introduction and cultivation,
  • Encouraging entrepreneurial innovation,
  • Promoting talent gathering,
  • Deepening “Internet +” program,
  • Fostering positive environment for development,
  • Strengthening financial support

The area already hosts leading enterprises such as China Electronics Corporation, 360 Group, www.toutiao.com, Sina, 58 Home, Perfect World, Tuniu.com etc., forming a well-functioning industrial foundation. Other companies active in Tianjin are Baido, Boeing, ISIP, Kylim, Tusstar, Feitong, Shell China, China Electrical Engineering Research Institute of the China Academy of Engineering, the Institute of Microelectronics of the China Academy of Sciences, Tianjin Corporation of China National Offshore Oil Corporation Tianjin Corporation (CNOOC).

There are financial incentives in place for new tenants to the park. Companies in internet related industries can get maximum 90% discount in tax (including Corporate Income Tax and VAT) in five years. In addition, the park especially set attractive policies for internet companies providing financial support in rent, HR, broadband tariff and so on.For new companies with over 30 staff, and for incubators, a 2-year rent relief for up to 2000-square-meter office space for two years is granted. For domestic and foreign well-known Internet leading enterprises which set up headquarters in the Internet industrial park, THT will give subsidy of around 150 USD per square meter for decoration with a maximum of 1,5 million USD.

On the park broadband access up to 1Gb is available. Any place in the park can be connected to the internet. The Chinese government has a regulatory system for websites that violate China's laws and regulations. Websites don’t violate laws and regulations can be opened without restriction. Free access to VPN is available.

Since the park has been established since 1992, all facilities for working and pleasant living are in place. A full overview of all supporting initiatives can be found on http://english.tjbh.com/system/2017/03/20/030144150.shtml.

Why is TMHT coming to the Netherlands and the United Kingdom?

TMHT will come with a delegation of four people to Europe, headed by Mrs. Li, the deputy director of the park. The purpose of this visit is to speak to both other business parks, as with companies that might be interested in establishing a presence in China. 

With other parks and clusters of Marine related companies TBIIP would like to exchange information and insights on attracting companies, setting up an ecosystem and supporting the growth of the companies. A further step could be to set up a collaboration in order to pave the way for Western companies to China and to refer China based internet companies that want to establish themselves in Europe. 

TMHT also would like speak directly with  companies that may want to establish themselves in China. The park management is interested which elements are important for these companies in determining their office location. In return, TMHT is happy to provide all kind of information about the Marine and IT landscape in China, trends and regulatory issues.

Mrs. Li would also be happy to facilitate a counter visit for the organisations she speaks with.

 

This entry in Asia was updated on May 30, 2018 by specialist.

How to send money and receive money from Iran for trade & business?

How to send money and receive money from Iran for trade & business?

Which Iran sanctions are lifted and what does this mean

This article is about payments for business transactions. For sending money to family and personal transactions, please check elsewhere, like this article.

If you want to use our consultancy services for getting business payments to or from Iran, then please contact us by clicking here

 

New U.S. sanctions in force since November 2018

In November 2018, U.S secondary sanctions on Iran came into full force, since then Europe and other signatories of Iran Nuclear Deal have been trying to maintain the trade with Iran. However sending or receiving money remains the most difficult part of doing business with Iran.

Unfortunately at the present time and due to the U.S sanctions on Iran, there are a lot of problems with using standard banking solutions in order to transfer money to and from Iran. However in non-sanctioned industries there is still a chance to benefit from the conventional banking solutions. Currently Iran is using its banking connection with neighboring countries in order to import basic goods and materials to Iran.

Consequences for businesses

International banks and financial institutions are still at risk of prosecution by the Department of Justice if they are based in the USA or use the US dollar. These prosecutions can be civil or criminal and are mostly substantial. Quite a number of major banks have been fined hundreds of millions of dollars for violating these sanction regimes. To avoid this risk, many banks have made the decision not to deal with Iran even when the transaction is completely legal in their home country. (source: Blackstone solicitors)

As an effect, for the Iranian government and for many companies, large funds remain inaccessible, and doing business with Iranian companies, although greedy to buy, remains difficult due to lack of foreign currency. Many of them will ask for flexible payment terms that will allow them to capitalise on their new investment before paying you.

For companies who want to do business in Iran, it is therefore important to work with a reputable local partner who if familiar with international payments and who also can assess the credit risk of delayed payment.

 

Letters or credit and guarantees

Before the sanctions, a variety of LCs were used in Iran to import and export, but after sanctions were imposed on the country, Iranian banks lost their credibility and merchants and artisans turned to a way other than LC to pay and receive their money.

However currently some Iranian banks through their daughters companies in some countries which have good financial ties with Iran are offering LC services to facilitate the business with Iran.

The cost of sight LCs in Iran is as follows:

LC Issuance (Sight / Usance) 0,15% of Bill amount , for 3 month
Export Doc L/C,payment commission,SWIFT 0,15% of Bill amount
LC Amendment Commission -Extension of Validity Date (over 3 month) 0,05% of Bill amount per month on excess portion

Payment restrictions on the Iran side

Due to the lack of Euros in Iran for payments to foreign companies, the Iranian government has also imposed restrictions on Iranian bank. A per April 2018, all foreign exchanges are managed through the banking system with the government rate and banks sell Euros only to importing companies and those who are traveling abroad. Importing companies need to show the original invoice, which has to be attested by the Iranian embassy in the issuing country.

Working solutions for transferring money to and from Iran

Alliance experts has compiled a report from various data sources with working solutions for transferring money to and from Iran. In this report we focus on:

  1. International financial institutions
  2. Iranian owned banks in foreign countries
  3. Foreign banks in Iran
  4. Foreign exchange companies

The report also contains a list of bank in various countries who do business with Iran, but in general are reluctant to take on new clients.

Order the report 'How to transfer money to and from Iran' now for 100 EUR!

 

What to expect in the report?

Table of contents:

1.      Introduction 3
1.1    Instex 3
1.2    Iran foreign currency exchange market 4
2.      Letter of credit and bank guarantee 4
2.1    List of banks which has done business with Iran 5
3.       Working solutions for transferring money to/from Iran 8
3.1    International financial institutions 8
3.2    Iranian owned banks in a limited countries 9
3.3    Foreign banks in Iran 12
   Standard Chartered PLC 12
   Islamic Cooperation Investment Bank 12
   Iran-Venezuela Bi-National Bank 12
   Future Bank 13
3.4    Foreign Exchange Companies ( FECs) 13
4.     Comparison of solutions 14

 
Tables:

  • The cost of sight LCs in Iran
  • Banks that are still doing business in Iran
  • Iranian owned banks abroad and where they have branch offices
  • list of the most active Foreign Exchange Companies in Iran

 

This entry in Asia was updated on May 2, 2019 by specialist.

Germany wine market: growth and opportunities

Germany wine market: growth and opportunities

Opportunities in the wine market in Germany

Wine. But not just any wine - Premium wine. And Germany is becoming a big market for this kind. Plus being a specialist retailer, players in this sector can look forward to booming retail business.

Premium wine

Premium wine is different from regular wine in terms of price and quality. It is usually the price that determines if the wine is premium or not, and in Germany, the wine is considered as a premium when the price exceeds €10.00.

Packaging wine

Premium wine is usually packaged in bottles colored to reduce the effect of UV light. Bag-in-boxes packaging is not usually opted for as it risks consumers interpreting it as low quality and another factor would be that wine won’t be able to mature in this type of packaging. Most bottles of premium wine are sealed with a cork and most of these bottles, especially in sparkling wine, need to be strong in order to withstand the amount of pressure CO2 is giving.

Legislative requirements

Always make it a point to check with the EU if your practices comply with their requirements in winemaking. Also, you need to comply with their regulation on Hygiene of foodstuffs (HACCP). It is imperative that only healthy grapes will be used and that contamination should be avoided at all costs. The retailer can benefit lower taxes by innovation through packaging leaning toward an environmental-friendly approach.

Labelling Wine

The label says it all and the EU has set specific rules on what to put on the label of the premium wine. Though legislation does not require putting down the blend composition, consumers would want to know that particular information. You can also elicit a positive effect if you mention the grape variety and vintage of the wine. In addition, mentioning ‘Reserve’ or ‘Grand Reserve’ can actually convince the consumer that the wine you sell is of high quality.

Non-legislative requirements

Reduce the level of sulfites and only add to maintain the quality of the wine. Chemical fertilizers should also be minimized as well. A good food system management is also recommended as buyers tend to be more confident with retailers who have one. And lastly, if you are into selling organic wine, make sure to mention wine more than telling everyone that it is organic. When selling, always provide a complete introduction to the company and its products and only send samples complete with labels, prices, and volume compositions.

Trade and macro-economic statistics

Import and export

Aside from being a producer of wine, Germany is also a country of importers and exporters of wine. It is very open to several countries when importing wine to its markets. At the same time, some of the wine exports are composed of domestically produced wine.

Production

Germany prides itself in a long history of winemaking. However, the domestic wine has lost a lot of its share due to instances of poor harvest.

Consumption

Germany also has its share of wine consumption so if you’re looking for Germans to distribute your wine, then it is highly advisable you educate them about your wine as well to convince them to market your products.

Market trends

Colour preferences of wine should also be taken into consideration. Premium white wine usually offers the best opportunities. Premium wine is also seldom packaged in a bag in boxes.

Market channels and segments

Specialist retailers dominate the market because people prefer to get premium wines from specialists rather than from other retail outlets with low market prices. Online sales also have a share of their success in the wine-selling trade. In addition, premium wine is also bought in organic retailers and consumers have made it a habit to check for quality in situations like this. Also, a new generation of wine consumers aged 22-25 focus more on quality than in price.

Market competitiveness

Based on market research, there is great fragmentation in the wine-selling market these days due to the consumers’ preference for traditional and domestic wine. The consumers also have no specific preference for brands. In addition, the market entry costs for wine is relatively high. All these are factors that may affect your wine start-up.

This entry in Europe was updated on August 3, 2017 by specialist.

How to export cosmetics to Japan?

How to export cosmetics to Japan?

How to export cosmetics to Japan?

In keeping with the mandate set forth by the Pharmaceutical Affairs Law (PAL), the Ministry of Health, Labour, and Welfare (MHLW) in Japan regulates cosmetic production, importation, exportation, and use.  In legal parlance, beauty products are classified as quasi-drugs and cosmetics.

What is cosmetics?

The law states that cosmetics are “articles with mild action on the human body, which are intended to be applied to the human body through rubbing, sprinkling or another method, aiming to clean, beautify and increase the attractiveness, alter the appearance or to keep the skin or hair in good condition.”

Cosmetics: Japanese market categories

  1.    Perfume and eau de cologne
  2.    Makeup cosmetics
  3.    Skin care cosmetics
  4.    Hair care products
  5.    Special-purpose cosmetics (sunscreen, shaving cream, and others)
  6.    Cosmetic soaps

What to do if you want to sell cosmetics in Japan

If you have plans of selling cosmetic products in a Japanese environment, you must make sure that the products you are selling are within the ambit of Japanese laws and are thus, considered legal in Japan. This is done through assessing product samples that are contracted or owned by the importer in “testing and inspection facilities” created by the MHLW. In this step, all the listed ingredients in the cosmetic product are tested and analyzed to ensure it is in consonance with PAL provisions.

The law strictly regulates specific labeling and advertising of cosmetics. Items that cannot be seen on the face of the label will automatically constitute a violation and as a result, it becomes classified as improperly labeled. When this happens, selling thereof is also automatically prohibited. Furthermore, it is imperative for the cosmetic importer to get a “cosmetics manufacturing and sales license” first prior to actual importation and distribution of cosmetics. Pre-approval cannot be waived in quasi-drugs as they may have active components that need further approval by the MHLW.

Tariff Duties on Cosmetics

-       Perfumes and toilet waters- duties range from 5.8 to 6.6 percent.

-       Hair Preparations- 5.8 percent tariff duty rate is imposed.

-       Shaving and bath preparations- 5.8- 6.7 percent is imposed for general duty and 3.9-4.8 percent for the World Trade Center

-       Soap products- A 5.5- 5.8 percent tariff duty is imposed.

Based on country data, foreign entities wanting to export cosmetics in Japan needs to strictly comply with the requirements set forth by the Pharmaceutical Affairs Law (PAL) to avoid getting your products banned or prohibited in the country.

This entry in Asia was updated on May 16, 2018 by specialist.

Canada food & beverage industry: trends and opportunities

Canada food & beverage industry: trends and opportunities

The food and drink industry in Canada

Canada is a potential market in the food and beverage industry as it possesses a wide consumer base with a multicultural population of 35 million. CAD152 billion market of material inputs and retail-ready products make up a large portion of the Canadian F&B landscape.

Canadian consumers tend to spend a substantial amount of their earnings on food and drink owing to the four important factors of value, convenience, health and sustainability that drive their choices.

Canadian consumption trends

Here is an overview of the Canadian F&B industry with notable consumer tendencies related to consumption:

  • Canada is geographically vast and demographically diverse. This results in a complex market that makes it imperative for exporters to understand their target group thoroughly and devise the appropriate market specific strategy.
  • The food and drink consumer base in Canada will see consistent growth due to salary hikes.
  • A huge demand exists in the Canadian food and drink market for material inputs and retail products that are ready for consumption.
  • Consumption trends are influenced by the diversity in consumer profiles in Canada.
  • Canadian consumers are price conscious, tend to opt for cheaper alternatives and favor private labels.
  • Convenience and ease of availability majorly impact the Canadian consumer’s food choices,  making the country a potential market for products that save time.
  • The organic food industry in Canada has tripled since 2006 and consumers are willing to spend more for food that is environment-friendly.

Trends in F&B retail and distribution

With grocery conglomerates taking over small stores and with the expansion of hypermarkets, a major chunk of the F&B sales have got attributed to larger stores. Supermarket giants like Metro and Loblaws are acquiring ethnic food chains besides expanding their own product lines.

Sales and distribution of alcoholic beverages are controlled by Provincial Liquor Boards of each area. Depending on the province, alcoholic beverages are sold via regulated retail outlets, unregulated retail outlets or private retail (mainly for non-regular assortment products). The alcohol regulations differ from province to province.

An exporter who wishes to enter Ontario - the largest alcohol market in Canada, should focus on establishing a good relationship with the Liquor Control Board of Ontario (LCBO).

If we talk about F&B distribution in Canada, the usual practice for most exporters is to enter the market through an established distributor or importer. One also has the choice to skip the channel partner and make a direct sale.

Tying up with an existing trade partner could be a wise choice if an exporter is keen on getting into the local network and grabbing market opportunities. Working with product champions and key partners also ensures greater success.

Regulations in the industry

The Food & Drugs Act, The Consumer Packaging and Labeling Act and The Provincial Regulations need to be adhered to. Monetary Penalties are levied in case of noncompliance to any of the above.

Finally, for a complex market like that of Canada, a strategic market research is crucial to success.

 

This entry in America was updated on August 3, 2017 by specialist.

Opportunities in the pharmaceutical industry in Japan

Opportunities in the pharmaceutical industry in Japan

Opportunities in the pharmaceutical industry in Japan

Japan’s pharmaceutical industry has undergone a huge change. By streamlining the approval process, there is almost no delay in new drug introductions and innovation. Let us take a closer look at the major factors have led to this transformation, making Japan an ideal destination for investment in the drugs and medicine industry.

No drug lag

A few years back, Japan’s medicine industry was faced with the challenge of a huge time loss between approvals of medicines in either Europe or USA, before the products finally reached the Japanese market. Moreover about 10% of world’s top drugs were not available in Japan at all. There was no incentive to lure companies to invest here. The year 2010 saw a change in the attitude of investors with most of them willing to set up production units here mainly due to Innovative Premium introduced by the Japanese government. Thus closing the drug lag, reducing the review time and even placing Japan ahead of Europe in gaining approvals.

Investment promoting policies

The Japanese government has been following a policy of price reduction on drugs every two years. While earlier this would cover all drugs and medicines, today there is exclusion of innovative products that attract an innovation premium. This in turn has boosted financial investment in the Japanese drug and medicine industry.

Effective cost control

Japan plans to continue to maintain a healthy growth in the pharmaceutical industry by following the Innovative premium policy along with a biennial price revision strategy. Although drug prices remained stable for nearly 10 years, an increase in the generic medicine costs helps to balance the innovation premium that the government shells out. This system seems to work very well in controlling drug costs.

Avoiding annual price revision

Although a rapidly aging population results in an increase in healthcare costs, there is no substantial rise in the drug costs in even ten years. Despite this if the government insists on abolishing innovative premium, increases generic penetration and practices annual price revision, a negative word about the market will go around. This may deter investors and may deprive patients from accessing innovative medicines.

Competence in dealing with trade barriers

Japan has intently abolished many unfavorable rules that it once followed. The 'two week restriction’ policy permitting doctors only to write prescription of two weeks as a safety precaution, as Japan was not a part of global clinical trials, has now been rendered invalid. This was a major deterrent to the Japanese market.

An investors market

Japan has emerged as one of the most attractive markets for pharmaceutical companies to invest in owing to its reward innovation policy. A progressive attitude and the European Federation of Pharmaceutical industries and Association’s (EFPIA) decision to offer an innovation premium are the key reasons for a pharmacy investor should look at Japan as a potential market.

For detailed nuances of the Japanese pharma sector, specialized market research will prove to be helpful before investing in a long term business prospect.

This entry in Asia was updated on June 6, 2018 by specialist.