Feature: Growing Chinese market provides Argentine SMEs with new opportunities

After a business trip to China, leather workshop owner Fernandez decided to try his luck in the Chinese market, and he is not the only entrepreneur in Argentina who finds the Chinese market attractive.

During his China tour, Fernandez found that the Asian country with the world largest population was no longer a shoe factory, but a major consumer of high-grade leather products.

Sniffing huge opportunities, the owner of two leather workshops in suburb Buenos Aires decided to restructure his business as China restructures its economy.

"Since the demand for high-grade leather products is increasing rapidly in the Chinese market, why don't we sell ready-to-wear shoes to Chinese customers directly, rather than supply raw leather to shoe makers?" he said.

Vintage leather produced in Argentina is widely used in world famous limousines and luxurious clothes, according to Fernandez. He is confident that shoes made in his country will successfully enter the Chinese high-end market.

Fernandez is obviously not the first Argentine owner of small- and medium-sized enterprises (SMEs) to spot business opportunities in China.

His countryman Horacio Moschetto said he already made quite a fortune back in 2011 by selling shoes to Chinese customers. In that year, he exported some 20,000 pairs of leather shoes to China, half of which were sneakers, and the rest polo boots.

"Polo has just got started in China, and some fine polo clubs and polo matches have been launched. While few Chinese factories produce polo-related sports gear, Argentine products can fill the gap. That's why I plan to double the output of polo boots next year," Moschetto said.

For a long time, Argentine agricultural tycoons have reaped benefits from the Chinese market. In 2011, for example, agricultural products, mainly soybean, accounted for more than two thirds of the country's exports to China.

As the two countries continue to strengthen their business ties, varied high value-added Argentine agricultural products, mostly from SMEs, also appear in the Chinese market.

Capilla del Senor, an Argentine cheese producer, made its first export to China in 2014. This breakthrough was seen as "the most important milestone in the factory's history" by its owner Alvaro Ugartemendia.

Ugartemendia initiated the business just five years ago, but now the factory has grown into a joint venture among his family members which produces 10,000 tons of cheese every day, two thirds of which go to overseas markets.

"Our targeting markets include Chile, Brazil and South Korea, but now we mainly go to China," Ugartemendia said.

His success on the Chinese market could not have been possible without the series of agreements on import and export of agricultural products signed between the two countries years ago.

The businessman has been to China for four times and also participated in a number of cheese exhibitions in the country. "Chinese customers will get to know the delicious Argentine cheese through our products, and then they will like it," he said.

After comprehensive market research, he said he believes his business potential in China is huge and now he is considering to double the factory's producing capacity.

As indicated by the shipping lists of DHL, containers exported from Argentina to China witnessed significant growth in the past five years, most of which were driven by SMEs.

The international logistic giant has thus launched a new website, headlined as DHL BUSINESS CHINA, to specially serve increasing Argentine SME owners desiring to try their fortune in the biggest emerging market.

Aside from apparel-makers and gourmet food producers, fashion designers and software developers are also among those who have started business with China.

Fashion designer Analia Tayar joined an Argentine business delegation to China last summer, during which the 26-year-old started her "China story".

During her visit, Tayar met an owner of an established Chinese clothing factory, who also operates a number of chain stores. In order to enrich his team with designers from different culture, the Chinese businessman asked Tayar to join them.

The young Argentine fashion designer accepted the invitation and right after the visit, she got the opportunity to design clothes for the next season and to sell her own brand in the Chinese chain store.

For Federico Bricker, founder of online game company Dokko Group in Argentina, he signed a contract with a Chinese partner to sell mobile games.

"We tried to cooperate with Chinese companies to develop new games together, but we were turned down because there are so many software talents in China that they don't need us. However, they offered to help us sell already-developed games to China," Bricker said.

"Now that the huge market of China is open to us, it is our turn to make full use of it," the 30-year-old added. Endi