Explainer: How the CIIE is reshaping global trade

SHANGHAI, Nov. 10 (Xinhua) -- When U.S. essential oil producer doTERRA first attended the China International Import Expo (CIIE) in 2018, it arrived with a modest 9-square-meter booth and an experimental approach. To its surprise, it secured 380 million yuan (about 56 million U.S. dollars) in intended orders and buyer interest.

Eight years later, its exhibition space has grown to 300 square meters. Beyond the exhibition hall, the company now sources more essential oils from China than from any of the other 44 countries in its global supply network, while developing products based on Chinese plants for markets at home and abroad.

The company's trajectory reflects a broader change in the role of the CIIE. What began as a platform for overseas companies to display their products has increasingly become a place where they build lasting business ties, develop products with Chinese partners and connect with markets far beyond China.

For international businesses, the value of the expo is no longer measured only by the buyers they meet or the orders they secure. It is also found in the supply chains, research partnerships and commercial networks that take shape around it.

TURNING EXHIBITS INTO SALES

The CIIE's most visible contribution has been to help overseas products make the journey from exhibition booths to the Chinese market.

Over the first eight editions, more than 3,400 new products, technologies and services made their debuts at the expo, while cumulative intended deals exceeded 580 billion dollars, according to the organizer.

Continuing that momentum, the ninth edition has attracted 4,142 overseas exhibitors from 162 countries, regions and international organizations, with more than 480 products set to make their global, Asian or Chinese debuts, a record high. More than 2,000 exhibitors are participating for the first time.

For some companies, the expo has offered a first foothold in a market that might otherwise be difficult to enter.

Peruvian alpaca toy brand Warmpaca, for example, made its debut at the inaugural CIIE in 2018 also with a 9-square-meter booth. The response from Chinese consumers helped the family business expand its reach. It now sells its products in more than 30 shopping malls across China and through e-commerce platforms, with annual sales exceeding 30,000 units.

For companies still seeking to enter the Chinese market, the expo can also serve as a testing ground for consumer demand and a meeting point with potential local partners.

Swiss sun care brand Eiger, making its debut at this year's event, is looking to enter China as interest in outdoor activities, hiking and skin protection grows, said Simone Portmann, co-owner of the company.

Eiger has begun working with a local partner and plans to launch online sales in China in the coming weeks. Portmann said the company saw an opportunity among Chinese consumers increasingly interested in skincare and outdoor pursuits.

"It begins with the first step, and we are very confident," she said. "We felt that now is the right moment because the market is developing a lot. People are starting to care about their health; they care about doing outdoor sports, hiking, climbing and trail running."

The expo is not only a launchpad for newcomers. Established international brands have also used it to introduce new products and gauge consumer interest. South Korean cosmetics group Amorepacific, for instance, has showcased new technologies and products at the event, with some of its exhibits subsequently entering the Chinese market.

BUILDING AND INNOVATING IN CHINA

The CIIE's influence is increasingly extending beyond the sale of finished goods. For a growing number of multinational companies, China is not simply a destination for products made elsewhere. It is also a source of raw materials, a base for research and development, and a place where products are developed and manufactured for global markets.

doTERRA's experience illustrates this shift. The company sources ingredients from 45 countries worldwide, but China has become its largest source of essential oils, said Owen Messick, president of doTERRA China.

It now offers 24 products sourced in China for sale both domestically and internationally. At this year's expo, the company is introducing two new products, including one made with perilla, or zisu, from China's Hunan Province and a herbal-based drink featuring ginseng.

The company's investment in local research has accompanied its expanding sourcing network. In November 2022, it opened a research and development center in Shanghai to work with local institutions on studying plants, testing growing conditions and researching the properties of essential oils.

The CIIE has helped the company build connections with local farmers, research institutions and consumers, Messick said. Those relationships have helped it better understand China's resources and market needs, while exploring ways to bring products developed with Chinese ingredients to consumers elsewhere.

A similar approach is taking shape in the spirits industry. French group Pernod Ricard, which has participated in all nine editions, has invested in a whisky distillery in Emeishan, Sichuan Province.

Its Chuan whisky combines expertise from Scotland and Ireland with local ingredients and production techniques, including Chinese barley and oak casks made from Danling oak, said Julien Hemard, CEO of Pernod Ricard China. The company hopes to bring the product to markets around the world.

"All this new trial and new experimentation is fantastic, because we also learn new ways to make whisky," Hemard said.

The shift is also evident in advanced medical technology. "China is rapidly becoming an important source of global innovation," said Will Song, global executive vice president of GE HealthCare.

Through the CIIE's open platform, GE HealthCare has continued to deepen its collaboration with Chinese partners and build on the country's innovation ecosystem, he said. Many of the advanced medical devices on display at the expo were developed in China by integrating global resources, put into clinical use in China and subsequently introduced to markets worldwide.

In these cases, China's role is changing from a market for imported technology to a place where global expertise and local capabilities come together to generate innovations with international reach.

CONNECTING MARKETS BEYOND CHINA

The CIIE's reach does not stop at the Chinese market. By bringing together companies, distributors and industry partners from different regions, the expo can also help businesses use their connections in China to reach other international markets.

Kok Ping Soon, CEO of the Singapore Business Federation (SBF), described this as an increasingly important dimension of the expo.

"The beauty of the CIIE over so many years is that it is not just a gateway into China. For many of our businesses, at least, it is also a gateway to international markets," Kok told Xinhua.

This year's expo marks the ninth consecutive year that the SBF has organized Singapore companies to participate. A delegation of 54 Singapore businesses is attending the event. Since their first participation in 2018, Singapore exhibitors have recorded a cumulative trade value of 533 million Singapore dollars (about 416 million dollars) through the expo, data from the SBF showed.

Kok said Singaporean businesses could connect with Chinese distributors and partners as well as companies that could help them reach markets in the Middle East, Central Asia and Africa.

With exhibitors and business partners from around the world gathering in Shanghai, the expo offers Singapore companies opportunities to connect not only with potential Chinese distributors and partners, but also with businesses that can help them reach markets that would otherwise be difficult to access, said Kok.

"China has such strong relations and ecosystems there," he said. "Many of our companies are able to latch onto that."

For Thailand-based conglomerate Charoen Pokphand Group (CP Group), the expo is not only a place to showcase products or pursue business in China, but also a platform for exchanging expertise and connecting companies seeking opportunities beyond their home markets.

"Our group has grown alongside China's development. In the earliest days, we brought advanced management concepts, equipment and marketing models from abroad into China. Now the situation has reversed. We take excellent Chinese models overseas," said Zhang Shuhui, senior president of the Beijing Headquarters Marketing Center of CP Group China's Agro-Industry and Food Business.

Many Chinese companies are also looking to work with CP Group to build factories and explore markets in Southeast Asia and other regions, reflecting what he described as two-way trade.