Department of Internal Affairs
Opening Doors to China
• China will soon be NZ’s biggest trading partner.
• China has an insatiable demand for NZ Dairy products.
• Infant Formula, Milk commodities and ingredients are critical for NZ
• Yogurt demand is growing rapidly 23% YOY (off a relatively small base).
• Yakult success has fueled probiotic demand.
• Drinking yogurt outsells spoonable yogurt 2 : 1.
• Local yogurt is generally low quality (runny/sweet).
• Little or no imported yogurt due to weight / cost / expiry.
• Demand for probiotics, protein, calcium and taste is high.
• Easiyo has been selling in china for 4-5 years.
• There are 450 illegal Easiyo web sites now!
• Initially Easiyo had an “exclusivity” model.
• One Distributor for one country – exclusive.
• But for China, it is too big and complex.
• Sales were slow, although easy to manage.
• Milestones were either not set or not met.
• The Exclusivity model was adopted to;
• Several non exclusive distributors for China/ SE Asia.
• However infighting rampant over pricing + territory.
• Web specials are too transparent, lots of grief!
• Supervision and admin costs increased to referee fights.
• This model was further adapted in 2011/12.
• The new model we call the OEM matrix.
• Early days so far but we are happy with progress.
• Sales have increased 2-3 x with less supervision.
• Distributors are happy as rules are clear.
• Cash in advance, NZ $, FOB, TT or L/C, we manage export documents.
• Minimum 20ft FCL.
• So what is the OEM matrix?
OEM China Matrix
Rules we have insisted on;
• One square at a time e.g.: Shenzen/ Grocery.
• RRP’s encouraged at similar price e.g.: “RMB 60/sachet.
• Currently One Easiyo Branded Distributor although….
• Exclusivity contract expires in 2013.
• All other squares are OEM.
• OEM is unbranded Easiyo sachets and maker.
• Square “owner” does own branding / design in China.
• Design approved by Easiyo before stock made.
• Square owner investing in their brand not ours.
• Easiyo gets cash up front, milk volume, capacity.
• Also helps with make at home awareness in China.
• If square owner is troublesome we can stop supply.
• Easiyo control the IP as Westland Milk key specs.
• So far 4-5 squares occupied with 4.5 WIP.
• We only allow one owner per square.
• Most popular squares will go first.
• Easiyo has found this matrix works.
• It is not the long term goal as not brand focused.
• However in china for next 2-3 years is working as we build a war chest for
Easiyo brand investment.
• Other companies could adopt part of this model for themselves?
• Thanks for listening,
Door to China!