Distribution & Sales Channels
Two major channels of distribution are available to U.S. exporters. The first is via large, well-established trading companies with strong financial resources and sales volumes, as well as an extensive presence in many industrial sectors. In many cases, these large traders form marketing or production joint ventures with foreign firms when demand volumes are sufficient to justify local investment. In highly specialized markets, these companies rely on agents who have appropriate contacts or expertise. The second available channel is through small importers that generally specialize in one line of business where they have proven networks and market know-how.
It is advisable for U.S. companies to perform careful due diligence to assure that a potential agent or distributor is financially healthy and able to fulfill obligations.
Using an Agent or Distributor
Some local companies are interested in establishing agent or distributor arrangements with foreign companies.
The General Contract Law governs agreements between foreign suppliers and local agents and distributors. It establishes a buyer-seller relationship under a sale of goods contract between the two parties. It is the responsibility of the local agent or distributor to apply for the necessary licenses and import permits.
New market entrants should seek an established agent/distributor with good local contacts, market expertise, and technical know-how. U.S. exporters must often provide training, marketing, and technical support. Frequent contact with local representatives is critical, especially at the outset, in order to build a good working relationship based on shared values and objectives, and to ensure there are no misunderstandings or communication problems.
The United States Commercial Service Fiji office at the U.S. Embassy in Suva can provide valuable assistance in locating potential representatives and acquiring preliminary market data. The staff can also help companies identify agents and distributors, conduct due diligence, and provide other types of support.
Establishing an Office
The primary forms of business organizations in Fiji are companies, including branch offices, joint ventures, partnerships, and trading trusts. U.S. firms may elect either to incorporate a subsidiary or establish a branch office by registering as a foreign company. The Companies Law requires U.S. firms to be registered under the Foreign Investment law, and to obtain a Foreign Investment Registration Certificate (FIRC). The Fiji Parliament passed the Investment Act 2021 which will eventually replace the Foreign Investment Act 1999. Once the new Investment law comes into effect, the requirement for foreign investors to obtain a FIRC will be removed, further streamlining the business registration process.
For more information, visit the U.S. Department of State website for Fiji’s Investment Climate Statement.
There are no restrictions placed by the Fiji government on franchising arrangements. U.S. firms operating in Fiji under franchise agreements include Independent Grocers Alliance (IGA), Gloria Jean’s Coffee, Burger King, and McDonalds. The small market size imposes some limitations in Fiji, but many companies use Fiji as an export base to other Pacific Island countries. There are also U.S. branded/franchised hotels including Marriott, Doubletree, Hilton, Radisson Blu, Westin, Sheraton, Auberge and Holiday Inn. U.S.-branded car rental companies operating in Fiji include Avis, Budget, Dollar, and Hertz.
Direct marketing is used widely in the sale of cosmetics, health products, cleaning and household consumer goods, electrical appliances, and service businesses. Major U.S. brands in Fiji include General Mills, Coca-Cola, Colgate-Palmolive, Johnson and Johnson, and Procter and Gamble.
Joint ventures and licensing agreements are important market entry strategies for U.S. exporters. Joint-venture partnerships offering technology transfer, specialized expertise, and training opportunities are effective mechanisms to reduce costs.
Some Fiji firms are actively seeking U.S. joint-venture partners who can provide much needed capital, as well as technical, marketing, and management skills, to a business relationship. Fiji firms, generally, offer assets, local vendor and government contacts, and established business relationships throughout the Pacific region.
The United States Commercial Service Fiji office at the U.S. Embassy in Suva can help U.S. companies with locating potential joint-venture partners.
A number of internationally recognized express delivery and courier services are available and have agents in Fiji, including FedEx, UPS, DHL, and TNT. The estimated time of delivery between large U.S. cities and Fiji is more than three to four working days for small packages due to the pandemic and the disruption of flights. Under Fiji Customs regulations, a commercial invoice is a requirement for all commercial imports and exports.
Businesses and investors can hire professional accountancy companies to do due diligence and check bona fides of any company with which they plan to work. There are several reputable accountancy firms which provide this service. The Fiji Financial Intelligence Unit (FIU) provides due diligence investigation services for government departments or authorities.