Elite AgentSELLING + MARKETING PROPERTY

How To Stand Out On The Global Stage (PtII)

IN THE SECOND PART of his series, Jason Hellyer shares his five partnership strategies can level the playing field for smaller agencies looking to break into the Chinese market.

I THINK IT’S fair to say that 30 to 40 years ago the local independent agent generally dominated the real estate landscape on their patch.

The brand, hanging on the shingle above the door, was for the most part their name, such as ‘John Smith Real Estate’. If they got in early, they may have nailed ownership of a region by calling themselves ‘Northern Rivers Real Estate’. Either way, the independent local agency was the reputable ‘go to’ agency for most consumers in the district.

Fast forward to 2015, and how things have changed!

If you take a macro look at Australia’s real estate market share data, national and international franchise brands now dominate. And when you drill down into smaller regions, even in regional Australia, the big brand market share domination trend continues.

So why is this?

Today’s real estate marketing is now driven by technology and strategic partnerships, with big brands generally having the capacity to bundle and deliver both.

When it comes to industry technology, well-funded and well-resourced franchise brands have had the jump on smaller independents. However, with a raft of affordable ‘out of the box’ real estate applications like MyDesktop now freely available to all, this big brand advantage is no longer the listing dealbreaker it once was.

The larger brand’s access to state, national and international networks does remain as a point of difference that sways the vendor’s decision-making process in favour of the bigger brand. Their perceived ability to tap into pools of ready-made buyers through partnerships and networks in far-flung lands is enough to convince the vendor to sign up.

With China dominating Australia’s inbound investment landscape, I’ll share with you five partnership strategies. When pitted with the larger brands they will level the playing field, enabling you to compete and stand out on the global stage.

Australia’s Gemtree Wines story is a brilliant example of how alignment with the right mainland Chinese partner can fast-track success in the world’s largest consumer market.

Twelve months ago I was fortunate enough to secure Andrew Buttery (CEO of South Australia’s Gemtree Wines) as a guest speaker at several agribusiness investment seminars I coordinated in Beijing and Shanghai. Andrew explained to the audience how Gemtree’s partnership with Mr. Song Yuangang (Chairman of Sichuan Taifeng Group) changed his business.

“Prior to the joint venture, Gemtree was only a contract client of another winery; but following Mr. Song’s $30 million investment in 2013, Gemtree purchased the winery, went on to build a cellar door, tripled staff numbers and, more importantly, tripled turnover and production,” Andrew told the audience.

He went on to say, “The partnership with Sichuan Taifeng Group is the most important development we’ve ever had and probably will ever have.”

The capital investment delivered by Sichuan Taifeng Group made a significant difference to Gemtree’s Australian operation, but the partnership also provided the additional benefit of access to China’s consumer market.

HOW DO YOU IDENTIFY THE RIGHT CHINESE PARTNER IN A COUNTRY OF 1.4 BILLION PEOPLE?
There’s no simple answer to this question. However, based on my personal experience (and anecdotal stories from others) here are a few strategies that will help you on your way.

  1. LEARN FROM OTHERS
    My first contact with Gemtree Wines was through participation at a function coordinated by the Australia China Business Council (ACBC) in Sydney. Since joining ACBC, I’ve found ACBC members are happy to share their experiences, both good and bad, provide advice and recommend contacts that will help get deals done.
  2. TAKE A LOOK FOR YOURSELF
    Travel to China to check out the opportunities for yourself. In the first instance build your initial visit around an exhibition or event that fits your industry sector. If you pinpoint the right event you’ll hit pay dirt in terms of the networking opportunity with people and organisations that can help you get to market. Conversely, if you get your event selection wrong it could be a costly and frustrating exercise.
  3. START SMALL AND MAINTAIN FOCUS
    It would take an incredible marketing budget to reach China’s 1.4 billion people, all of whom are spread across a country that is nearly two million square kilometers larger than Australia. Focus your time and effort in one or two first- or second-tier cities, gain some traction and build from there.
  4. DO YOUR DUE DILIGENCE
    Once you’ve narrowed your field of potential investors or partners, take time to research their credentials and suitability as trusted and long-term partners. Your due diligence may uncover candidates moonlighting as sector experts who are in reality merely agents with little or no experience acting on behalf of others.As Andrew (Twiggy) Forrest said in a recent interview, “there are way too many middle-men in China”. Mr Forrest went on to say, “We counted 19 between paddock and plate in our exports into China.”
  5. HAVE PATIENCE
    Follow a philosophy of ‘friendship first, business second’ and you’ll do well when working with Chinese partners.There’s no rule book that determines when courtship ends and business starts, but in this dance I let my Chinese counterpart take the lead. I regularly see transactions evolve over 12 to 18 months. However, in the very successful Gemtree Wines transaction, the deal took more than two years to complete.

    I’m sure Andrew Buttery and his Australian team at Gemtree Wines would agree that the wait was well worthwhile!

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Jason Hellyer

Jason Hellyer is General Manager of Ray White Rural Victoria. Ray White Rural Victoria and our regional Victorian franchise network, specialises in regional and rural property marketing and sales, property management and livestock marketing