China – Focus on a Growing Market – Part 3 – Looking to the future in pest management
Welcome to the fastest growing pest management market on the planet! This could easily have been the wording on the sign hanging over the registration area for the 2012 Chinese National Pest Management Congress held in Nanjing China in late March.
Over 500 delegates attended, included Chinese service companies, suppliers, academics and key people from the hotel industry and international trade organizations. The event is seen within the Chinese market as the most important annual event and being the only “Westerner” invited presented its challenges, but with an increasing number of the leaders from the Chinese industry engaging with other markets there are plenty of delegates wishing to practice their English and learn through discussion at every opportunity.
From left to right: Peter Tsui of the Green Harbour Group, Xu Jiang Cheng of Beijing Greenleaf, Zhou Yuan from Harbin Pest Control Technology, Chuck Jiang of Guardian Shanghai Hygiene Services, Rob Fryatt of Xenex Associates and Pascal Cai from the Chinese Pest Control Association
So what are some of the important facts about the Chinese pest control industry? Huang Xiaoyun, the Deputy Director of the Chinese Pest Control Association (CPCA) is clear that there are now 10,000 servicing companies in China – that is more than the whole of Europe – but she still believes that “The PCO is still rare in China and there are still too few PCO companies for the needs of the population”. This is reflected in the value of the service market at a little in excess of US$1000 million, only about 20% of the size of the European market. What is important is that the industry has been identified by the Chinese government as a valued contributor to health and hygiene and therefore a key industry in building the domestic prosperity of China, a major focus of the current phase of economic development.
I was invited to contribute to an industry debate on the future development of the Chinese pest management market. Such was the interest and level of debate that this became a marathon four hour session on its own. It was clear that the industry recognizes its own deficiencies and has a plan to improve not just its image within the country but awareness of its value amongst the 1.3 billion Chinese.
Recent activity has seen the initiation of a structured national training pro- gramme that recognizes the differences between general pest management and the specialist services required in critical situations such as food production and hospitals, where a higher level of certification is required. As all things Chinese, the right infrastructure is in place with a central training school in Beijing and local schools being developed in Shanghai and Shenzen.
The industry is expecting to operate in a more regulated environment in the future, but to the Chinese, regulation is not just about products but all aspects of the operation of a service or business, from financial audits to staff pay and conditions. This, the industry leaders are sure, will require higher levels of professionalism and an increased focus on management skills to drive the industry forward.
During the debate, Chuck Jiang, the CEO of Guardian, one of the leading Chinese pest management companies put his clear perspectives on the next 5-10 years: “More companies will go national. I expect that one Chinese company will reach revenues in excess of US$ 1 billion.” He continued “As the industry becomes more professional, leading pest management companies will become known to the consumer in the same was as brands like Rentokil, Orkin and Terminix are known in the West”.
One key factor in this progress will be through mergers and acquisitions. This subject was covered by Peter Tsui of Hong Kong-based Green Harbour Group, who has considerable experience of operating within pest management and other hygiene services in China. Peter, along with Xu JiangCheng the CEO of Beijing Greenleaf, one of the fastest growing suppliers to the national market, both highlighted the Chinese approach to keeping business close to family as it grows to ensure trust and commitment. This, they highlighted, can often hold back progress so acquisitions and mergers not only bring critical mass size but also wider skills, both technical and managerial.
One thing is for sure, the leaders in the Chinese pest management industry have their eyes wide open to the future, understand clearly where it needs to build skills and are building skilled and special partnerships to assist its growth. They have a long way to go, but as the Chinese proverb says: Every journey starts with the first step. China is already on the path, map in hand.
Published in International Pest Control – May/June 2012 issue.
Author: Rob Fryatt is Senior Associate at Xenex Associates Ltd. info@xenexassociates.com, www.XenexAssociates.com
Category: Special features
