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Q&A: Targeting Chinese Consumers

California wines are growing in popularity in the global market, and Nandha Imports & Exports Inc., based in both Napa Valley and Hong Kong, is at the forefront of this trend.

The company, known as Nandha Wines, exports California wines around the world, primarily to Hong Kong, China and India. Rory Q. Lynch, chief operating officer and chief financial officer, is based in Napa Valley. Lynch served as the director of finance and export sales for Terra Valentine Winery in St. Helena, Calif., before being tapped to run a wine export business by the Nandhagopal family, who run India-based Mohan Breweries and Distilleries Ltd. Mohan Breweries provided the seed money to help launch Nandha Imports & Exports in October 2011, and Lynch serves as one of two employees who helps run the company.

As international business owners try to reach Chinese consumers, they can rely on a trusted online foreign exchange service to convert currency and initiate international payments. In addition, online FX providers may offer low markups and complete transparency around the status of wire transfers.

Every vintner and winery wants to be in the business, but the reality is it takes investment, it takes having staff that are interested and have the ability and desire to travel.

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Here are Lynch's insights into navigating taxes and foreign transactions while doing business in China.

As a wine exporter, why do you target the Asian markets?

Lynch: For the sheer market size, one, and also for the maturing of the new generation of social network users, and also because of the earning capacity of those societies now. They enjoy the prosperity of having things that are made outside of China, or outside of India. Over the last five years or so the Chinese have really driven up the market in terms of the demand of these wines.

Is it expensive to export wines to China?

Lynch: It's become more favorable. They've lowered the duties to around 50 percent, and the market in Hong Kong is duty-free so we're able to enter the market very easily. But Hong Kong is such a mature market, it's so competitive, so the vicinity of China makes this a real opportunity. If you have your wines in Hong Kong the logistics of getting into mainland China or to be able to market and find customers is more feasible.

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What is the key to being successful in the Chinese market?

Lynch: I think the key is just to be patient. If it's going to be a market in China or India, or whatever export market it is, there's an administrative part of it that I think we here in the States can perceive as kind of burdensome. The other reality is once you have a network in place, there's the paperwork, the documentation, the lab analysis of the wines. A lot of people talk about wine exports. Every vintner and winery wants to be in the business, but the reality is it takes investment, it takes having staff that are interested and have the ability and desire to travel.

How do you handle foreign transactions?

Lynch: There's so many importers or people that have an interest that knock on your door to get a price or to get one of the wines you're offering. For that, the standard is if we're going to do business 100 percent of the money has to be in advance on any of the goods being sold. When I sell wines, I bill them in U.S. dollars and they pay me. They manage the exchange of the money and they wire it to me. Customers are asked to wire payments to us. The process is executed swiftly as long as supporting documentation such as commercial invoice and a contract are in place. The mobility of banking, having the capacity to move money from the U.S. to India or India to Hong Kong makes it relatively simple.

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