Irish companies offer solutions for Chinese market Agritech Medtech Fintech Cleantech Engineering Insights

Irish companies offer solutions for Chinese market

Irish companies already export almost €1 billion to China.

A growing economy has positioned China as an attractive market for foreign companies from across the world. Rapid growth also presents challenges, which Irish companies active in a number of sectors are particularly well positioned to overcome.

Today, 300 companies supported by Enterprise Ireland, the national export agency, are conducting business in Hong Kong, Beijing, Shanghai and locations across the country, with that number expected to increase over the coming years.

With offices in Beijing, Shanghai and Hong Kong (serving Shenzhen), Enterprise Ireland is well placed, both geographically and in terms of subject expertise, to support Irish companies to assist Chinese customers and partners.

Mary Kinnane of Enterprise Ireland says that the market is growing in size and importance for Irish companies.

“We currently have over 300 Irish companies engaged with China. Of those, over 150 have some form of physical presence here. Exports from those companies to China were worth €1.03 billion in 2017, accounting for 54% of all Enterprise Ireland client exports to the Asia-Pacific region.”

As an open economy, Ireland is supportive of China’s Belt and Road Initiative, which fosters connectivity and spurs mutual economic growth. Business partnerships between China and Ireland also benefit from the country’s committed membership of the EU. As bilateral trade continues to grow year on year, new direct flights routes between China and Ireland in 2018 has also improved ease of doing business between both countries.

Enterprise Ireland focuses on key sectors in the region, including agritech, pharma, engineering, cleantech, medtech, fintech, ICT, and education, with Irish companies offering solutions that can assist China’s continuing growth.

Agritech

Ireland is known across the world for its agricultural heritage. Its reputation has developed into the 21st century, as a new generation of farmers, manufacturers and agri-scientists have established a deserved reputation for innovation across the entire agricultural value chain.

Irish manufacturers are world leaders in the specialised production of machinery that can help to consolidate and modernise Chinese farms, such as mixer wagons for feeding cattle, high-quality baling and wrapping systems and slurry spreaders.

Irish agri-engineering exports are now worth a quarter of a billion euro annually to the Irish economy.

New technologies targeted at improving farm management practices, such as advances in sensors and electronic record keeping, have been developed with the modern farmer in mind. With government support of mechanisation, these technologies, built to a world-class specification, are gaining traction in China.

Ireland also competes with the very best globally in terms of food quality, with extremely low rates of antibiotic usage, no hormone usage, very high standards of animal welfare, and full traceability from fork to farm.

Companies such as Dairymaster have led the way with significant investments in in-house R&D and a strong customer focus. Dairymaster’s latest innovation is a smartphone app that allows farmers to remotely control their milk tank. MagGrow has developed a technology that magnetises the droplets from a sprayer, causing them to bind better with plants, thereby reducing the amount of liquid required.

Engineering and cleantech

The People’s Bank of China estimates that reaching the Ministry of Environmental Protection’s targets for air and water quality will cost the country €255 billion over the next five years, while clean-up of soil pollution will cost a further €855 billion. Addressing this legacy issue is firmly in the crosshairs of Chinese businesses, and firms will need to recruit partners from around the world to meet these ambitious targets.

Ireland is fast becoming an international clean technology hub and its water treatment sector is delivering innovative and proven solutions to customers worldwide. Companies from the country are known for the highest standards of reliability, quality and delivery – whether on-site at major construction projects or in off-site manufacturing contracts. And with a thriving innovation ecosystem, the industry is continuing to break ground with new approaches to tackling some of the world’s most important sustainability challenges.

Pharma and healthcare

An ageing population, rising disposable income, healthcare reform and increasing non-communicable health issues have made China the world’s second-largest pharma market.

Meanwhile, Ireland’s medtech sector has become recognised internationally as innovative, integrated and globalised. With a uniquely collaborative ecosystem that spans global multinationals, start-ups, university researchers and government-supported R&D centres, Irish exporters deliver an unparalleled innovation advantage to their customers. Continually looking to the future, a new generation of medical device, diagnostic and digital health companies are pioneering design-led biomedical thinking to meet their customers’ evolving needs. Underpinning the medical technology industry, an established and lean Irish sub-supply sector and supply chain is capably servicing the exacting requirements of market leaders globally.

As domestic demand continues to grow, new GMP regulation is enforced, and domestic pharmaceutical companies increasingly seek growth opportunities beyond China, the number and complexity of pharmaceutical engineering projects is likely to continue to increase. These are areas in which Ireland, with its thriving pharma industry, is knowledgeable and has a proven track record of delivery.

Financial services

China’s rapid growth is continuing to create a booming middle class, with increased demands for pensions, social security and financial services.

Irish financial service companies have been through this process before and have the experience and know-how to help Chinese companies overcome the challenges they will face in this environment.

Payment gateways, global tax reclaim, enterprise data management backend office services (in which Dublin is already a world leader) and cloud solutions are all areas in which Enterprise Ireland companies can serve Chinese customers.

ICT

In ICT, China is experiencing huge demand for mobile, cloud and travel tech industries.

But that’s not all: rapid urbanisation has driven a spike in demand for smart city and Internet of Things solutions.

As the Silicon Valley of Europe, Irish companies are harnessing their engineering and tech expertise to drive real innovation in this space – and an outward-looking business community is keen to take this experience and share it with the rest of the world.

Education

Education is one of the largest contributors to non-food client exports in China, and 21 Irish education institutions have a direct market presence in the country.

To date, 49 high-functioning joint programmes have been approved by the Chinese Ministry of Education, as well as one joint college.

The Claddagh Scholarship Programme, the first and only national level scholarship programme designed exclusively for Chinese students includes in excess of 250 scholarships from 17 different education institutes at every level, across over a hundred different fields of study.

The Irish China Alumni Network (ICAN) with its own website platform and WeChat channel now has over 2,700 followers.

To date over 20 positions within Irish companies and organisations have been advertised to the alumni, so far nearly 60% of these positions have been successfully taken by ICAN members.

Consumer products

China is currently the world’s number one online shopping market, accounting for over 40% of the global ecommerce retail sales. It is currently dominated by third-party platforms – Alibaba, JD, QIY, Ctrip and Tencent, where consumers can purchase a wide range of products from many sellers.

In 2016, Alibaba and Tencent delivered record-breaking profits, signalling just how healthy China’s consumer market remains. The takeaways from Alibaba and Tencent’s results are not that they make a lot of money but how China’s most successful consumer-facing businesses have quite different business models to those in the West. Understanding what makes the models unique provides invaluable insights into what appeals to Chinese consumers and how successful brands are serving them, many of which can be replicated on smaller scales for foreign brands. Pyramid schemes are out, entertainment and mobile micro-payments are in.

Enterprise Ireland provides first-hand knowledge and experience of the consumer market and helps companies we support to validate their product in China, as well as with establishing an ecommerce presence where necessary.

Irish companies in China

David Byrne from Enterprise Ireland has said that the reasons for Ireland’s success can be attributed to relationships and product.

“Irish people are naturally very warm, friendly and open. We’re also very good at building relationships and that stands to us.

“But just because you’ve built that relationship doesn’t mean you can phone it in. Chinese business partners expect good quality and service – that is something they get with Irish companies.”

With high quality products and a gift for problem-solving, it’s time that Chinese businesses started the search for their Irish Advantage.

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