For its Atlantic Canada Business in Asia Consultation report, the Asia Pacific Foundation of Canada (APF Canada) consulted businesses from Atlantic Canada that are exporting to Asia in order to learn more about their experiences in doing business in this part of the world and to better understand the specific challenges they face in exporting to Asia Pacific markets.
Thirty interviews were conducted with businesses from Canada’s four Atlantic Provinces for this instalment of APF Canada’s The Asia Factor in Atlantic Canada project. The interviews focused on four central themes:
• What were the main drivers of expansion into Asia?
• How did companies establish their relationships with clients and partners in Asia?
• Once in market, how did companies manage their operations in Asia?
• What are the main challenges that Atlantic companies face in Asia?
Business in Asia Consultation Findings:
APF Canada found that there were two major factors influencing companies’ decisions to expand into Asian markets. Some were drawn to Asia because senior employees had pre-existing knowledge about the opportunities within their industry. Other companies were “nudged” into Asian markets by an Asia-based client or distributor with an interest in their goods or services.
This indicates that opportunities for Atlantic Canadian companies to expand into Asian markets are well known in some established sectors, such as seafood and aerospace and defence, but in other sectors companies could be more proactive in exploring opportunities for their products and services.
In order to establish relationships with new clients in the Asia Pacific, Atlantic Canadian companies highlighted:
• The importance of being present in the region;
• The utility of leveraging Canada-Asia networks and the usefulness of government export-related services; and,
• The importance of due diligence and taking time to establish a good working relationship with an Asian partner before negotiating a business deal.
Managing the Market
Once Atlantic Canadian businesses began exporting to Asia, they managed their operations in the region differently, not only within sectors but also across countries of destination.
Some companies chose to build relations with a distributor while others hired agents to represent them. A smaller number entered into partnerships with local firms to develop products to specifically target an Asian market. Some opened either an office or a store in Asia and moved full-time employees into the region. This allowed these companies to continue to build relationships, increase local market intelligence, and show their commitment to the market and their customers.
There is no “right way” to enter and do business in Asia. The most successful companies accounted for market variations and developed a different model for each country.
Rising to the Challenge
Cultural and marketing challenges and language barriers while operating in Asia were highlighted as challenges by the majority of respondents. Companies identified four main ways to address these challenges: gaining experience through travel, undertaking specific education, leveraging Canada-Asia networks, and hiring employees with Asian-Canadian backgrounds.
Other logistical challenges Atlantic Canadian companies face in doing business in Asia relate to passenger travel, air cargo and maritime shipping. Atlantic Canadian firms face an array of customs regulations, labelling requirements, duties, and other potential barriers to trade in Asia. Companies suggested these challenges could be mitigated through policies to lower tariff barriers and through federal or provincial efforts to provide publicly accessible information about Asian regulatory environments.
About The Asia Factor in Atlantic Canada:
The objective of The Asia Factor in Atlantic Canada project is to assist the region in better responding to Asia’s rising global economic importance by providing critical information on the opportunities and challenges for Atlantic Canadian business and trade with Asia.
This project represents the Atlantic side of The Asia Factor, a nationwide, multi-year project launched in 2014 by APF Canada that examines the interaction of each province and territory with Asia. The Asia Factor provides comprehensive resources, information, and analysis on provincial-level Canada-Asia relations.
The Asia Factor in Atlantic Canada project deliverables include:
• an interactive website that shows how Asia's impact on Canada differs for each province and territory
• an infographic booklet on Atlantic Canada's relations with Asia according to key indicators (image files available upon request)
• blog posts
• a business consultation report
• success stories for Island Abbey Foods and Muwin Estate
• Atlantic Canada-Asia-focused market analyses for clean technology, value-added foods, and ocean technology
• a project summary report
All deliverables are available in both official languages.