Biolan becomes a brand leader in China
In Finland, a composter is placed at the back of the garden and landscaped with plants to become as discreet as possible. In China, it is placed centrally, may be red in colour, and its high quality is emphasised with stainless steel trims. After all, an imported product should have a quality appearance.
"In China, environmental products are bought by the wealthiest consumers. Environmental awareness is trendy and you want to show it off to others," says Kaj Paavola, Biolan Group.
The company's home base in China is Suzhou, a city of around 10 million citizens located west of Shanghai. Although the clientele for composters is limited, the potential demand is huge. If you draw a 100-kilometre circle around Suzhou, there will be 50 million millionaires within that circle.
"Furthermore, the number of middle-class consumers is constantly growing, alongside environmental awareness," Paavola says.
Last year, Biolan's exports to China took an upward turn and the company expects China to displace Russia as a key export destination this year.
"Last year, demand really boomed and I see no reason why it won't continue at a similar pace."
Spreading the word
Biolan began exploring the Chinese markets in 2008. When asked what kind of analysis preceded this decision, Paavola replies with amusement:
"It was more of the type of crazy and bold decision that is typical of Biolan than the result of an in-depth analysis." Paavola led the company's operations in Suzhou, China in 2010–2014.
Biolan's presence in China was initially based on the import of peat products and the manufacture of plastic components. However, its long-term goal was to "catch a big fish", in other words to make a breakthrough in the Chinese consumer market with its garden and environmental products. Although the green trend was still far in the future, Biolan decided to patiently wait for change to happen – and to work at accelerating the pace of change.
"We spread the word on composting and organic garden cultivation. We share information through the social media and cooperate with student associations, and have built teaching gardens for schools and day care centres. This is the same method that we used in Finland in the 1990s to increase awareness of small-scale composting."
Biolan's work in China began to bear fruit in 2012, when its products became available through an online store. Today, Biolan is the leading brand in composters and composting toilets in China and the world's largest online store, Taobao.
"We are still the king of the hill in this field, but we know that competitors will emerge at some point. However, we are in a good position to face that competition," Paavola says with confidence.
Piloting is suitable for China
Today, Kaj Paavola heads Favorit Tuote Oy, a Biolan Group company that manufactures all environmental rigid-plastic products sold under the Biolan brand, including composters, dry toilets and wastewater treatment systems. The bold factory investment made in 2011–2012, including extensive automation, will also enable higher export volumes to China. Biolan is also dedicated to continuous research and development in order to meet customer needs.
"Chinese consumers have high demands. They expect not only high quality, but also more bling-bling than Finnish consumers. While our production knowhow remains in Finland, we localise our products in China. Even as we speak, we have product development projects underway that have nothing to do with the products we sell in Finland."
Tekes has funded several of Biolan's development projects aimed at entering international markets. Such funding has enabled Biolan to develop products, increase its market intelligence and test business models suitable for the Chinese markets.
According to Paavola, Biolan has also achieved good results by participating in roadshows organised by Tekes in China, in order to present Finnish cleantech knowhow.
"These roadshows have been well-organised, practical and successful, and we have made useful business contacts through them."
Paavola says that cooperation with Tekes has been excellent – particularly in recent years. However, this was not the case at the beginning of the 2010s, when projects funded by Tekes were supposed to enhance product development, not create actual products.
"In China, this approach does not work at all. You cannot go there with a product development project that might lead to a product some day. Before you can actually enter the market with the product, it will already have been copied. "Now Tekes is encouraging companies to test and pilot their products. This is exactly what we need for the Chinese markets."
Managing Director, Favorit Tuote Oy/Biolan Group
kaj.paavola (at) biolan.fi
Tel. +358 400 404 856
Text: Jarno Forssell, Pohjoisranta Burson-Marsteller Oy