South-East Asia is an extremely desirable export destination. For example, GDP per capita in Singapore id 1.5 higher than in the USA and 46% higher than in Switzerland; almost 100% of food is imported. In addition, the leading regional offices of many international trading companies are situated in Singapore, making this country the most significant trading hub for all countries of Southeast Asia. The economies of ASEAN countries grow rapidly – 6-8% per year and the market barriers are not as high as at mature EU market.
This region is especially promising for the products of horticulture. Retail prices in ASEAN of traditional Ukrainian fruits and berries, exotic in South-East Asia, are on average five times higher than in the EU and 20-30 times higher than in Ukraine.
In January 2018, a large trade mission, organized by FAO and EBRD under the support of EU4Business, went to three prosperous South-Asian markets of Singapore, Malaysia, and Indonesia. Seventeen Ukrainian producers of confectionery, honey, organic products, fresh produce, and frozen berries met with more than 200 local buyers: distributors, traders, and retail chains.
The Embassies of Ukraine in Singapore and in Malaysia also supported the mission and played an important role in establishing the connections within the countries.
Since the mission, Ukraine has seen an increase in exports of such categories as apples and pears, fresh and frozen berries and cherries, homey, and chocolates to Singapore, Malaysia, and Indonesia.
First containers with Ukrainian apples reached the shores of Singapore in November 2018, according to Ukrainian Horticulture Association. Since then, for apples and pears category, the exports to Singapore, Malaysia and Indonesia skyrocketed from scarce 9 thousand dollars in 2017 to more than 800 thousand dollars for the first five months of 2019. It is worth mentioning that for completely new markets, this is a genuinely impressive result.
Another success story for Asian markets is berries. A few months after the mission, Ukrainian company AllBerry started shipping frozen berries and berry smoothies under their brand to Singapore.
These volumes maybe not that large so far. However, most importantly, Ukrainian companies have managed to enter entirely new growing markets, with high GDP, purchase ability, and income, paving the track for those exporters who will follow.
Indeed an impressive breakthrough was seen already in September 2018 when Redmart (now – Lazada), key Asian retail platform owned by AlibabaGroup, started selling Ukrainian chocolate by Malbi Foods (TM Millenium and TM Lyubimov), one of the participants of the trade mission, in Singapore.
Olha Desytko, Head of the Export Development Division at Malby Foods, commented on this important milestone: “Today we received the confirmation that TM Millennium entered online platform Redmart in Singapore. Since buying at Redmart’s is very popular among Singapore’s population, we hope to enhance our brand’s recognition, which will further increase the export of our products to Singapore and other countries in the region. We are grateful for the support of FAO, the EBRD and the Embassy of Ukraine in Singapore and Brunei”.
A few months later, already in December 2018, chocolates by Malby Foods were already sold in a retail chain of Malaysia: “It is very pleasing to give feedback on the positive experience from the trade mission to Singapore and Malaysia for the second time. Today, we’ve made several shippings of TM Millennium and TM Lyubimov to Malaysia. So far, this is a small step in the global context, but a big step for our company. We hope that Malaysia will develop a taste for our chocolate, and we will increase sales,” commented Ms. Desyatko.
Indeed, since the mission, Ukraine has seen the increase in exports of chocolates to the region, from less than 15 thousand dollars in 2017 to almost 300 thousand by the end of 2018:
In 2019, we still have the repercussions of this success. For example, last month Lazada (formerly Redmart) started selling a range of Ukrainian honey and creamed honey by Askania-Pack. Though this company didn’t go on the trade mission, the contacts established during the mission played a crucial role in this contract.
“This trade mission is unique,” says Volodymyr Shkliar, CEO at Biotec Group, a Ukrainian honey exporter. “In my opinion, this mission was successful due to the thorough preparation that took us nearly two months – and this only seems to be a short term. During this time, the participants studied in detail the history, mentality, consumer preferences, and the most important economic indicators of the region.”