Discussion of Factors Affecting Taiwan Small and Medium Enterprises’ Establishment of Marketing Channels in China

Abstract

Ever since cross-strait direct transportation link in 2008 as well as the signing of ECFA between Taiwan and China, Taiwan has encountered new opportunities to sell fresh agricultural products to China. High economic benefit agricultural and aquatic products including grouper, tea leave and Oncidium are entitled to zero-duty niche within three years. According to statistics from the Council of Agriculture, growth momentum for Taiwan agricultural products in recent years mainly comes from mainland China. The amount of Taiwan fruits exported to China in 2009 has increased by more than 2 times compared with the one for 2008, while amount for fresh vegetable exported increased by more than 8 times. The value of Taiwan agricultural products exported in the first half of 2010 was US$1.874 billion, a 19.3 % increase compared with the one for same period of the previous year. Among them, export to China was US$23.2 billion, a 36.4 % increase compared with the one for same period of the previous year. Opinion poll conducted by Global Views Monthly indicates that over 70 % of people living in the 5 major cities of Taiwan consider that “a mayor should put agricultural product export assistance on his/her priority list.” It is therefore obvious that agricultural product export which comes with substantial benefits are highly concerned by both Taiwan and China. This research focused on companies willing to explore agricultural product marketing channels in China and developed questionnaires based on the Theory of Planned Behavior (“TPB”) for investigation over company management and responsible persons under the purpose of analyzing which factors will affect company management and responsible persons’ willingness to explore marketing channels in China. The result indicates that company management and responsible persons’ attitude, perception, and behavioral control over establishment of marketing channels in China have significant influence over their willingness to do so. It is therefore obvious that people interviewed hope that government can provide a centralized service window for companies establishing marketing channels in China in order to solve various issues involved. Furthermore, people interviewed are very concerned if they understand counterparty’s related laws and regulations, if they understand local consumer’s needs and if they can control local existing marketing channels before their setting up of marketing channels in China. This research focuses on these issues and presents recommendations accordingly.