With its impressive economic growth over the years, China is seen as an eldorado for international companies, becoming the second-largest market in the world right after the U.S. A decade ago, China was considered as the manufacture of the world with millions of workers and cheap labor costs. However, China was able to develop its activities, especially in promising and innovative fields such as new technologies and data science. With the rising purchasing power of China’s tech-savvy population, an increasing number of foreign companies are trying every year to enter the market and conquer Chinese consumers. Nevertheless, you should take into account that foreign brands no longer have the monopoly of the Chinese market, because of competitive Chinese brands that are ready to take their piece of the cake. Thus, having the right strategy is crucial if you want to enter successfully the Middle Kingdom’s market. In this article, we will give you all the keys to export your products in China without a hitch, as well as some tips and advice from our experts.
Export to China: one of the most dynamique market in the word
With 1.4 billion people, China is the world’s largest consumer market, which obviously makes it an attractive target for exporters. China’s growing middle class will lead to increased opportunities in a variety of industries, especially in terms of consumer-based industries, franchising, and the services sectors.
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What Are the Advantages of Exporting Goods and Services to China
China is one of the fastest-growing markets for foreign brands in recent years. In fact, with a burgeoning demand for higher quality and premium products, innovative services like digitalization have paved the way for new emerging trends.
Along with urbanization and an increase in disposable income among consumers who are seeking new experiences and new culinary tastes, for example, Chinese people have become some of today’s most valuable customers internationally. Before you enter this booming market where many players from around the globe compete fiercely (Chinese vs international companies), it might make sense to do some preliminary research about the Chinese market itself.
Why Should I Choose China to Exports my Products?
With more than 980 million people connected online in China, e-commerce is an industry that has been growing significantly in the past few years and is set to be even more promising in the years to come following the Covid-19 outbreak. Furthermore, Chinese consumer spending is expected to triple to over $8.5 trillion a year by the end of 2025. China is the place to be because it is where growth is being driven, even after the pandemic that has affected a lot of businesses.
Moreover, with their rising purchasing power, Chinese consumers are more inclined to spend more on foreign products, that are seen as of higher quality. The Chinese market is transitioning from an investment heavy to a consumer-dominated market.
Still, tapping into that huge market can present challenges for foreign businesses. To take all opportunities and avoid the pitfalls of China’s competitive market, extensive research is a must. As a matter of fact, there are some sectors of the economy that the Chinese government doesn’t open to foreign competition (you can contact us to have more information about that or look at the Chinese government’s website). Also, while the government has taken steps to curtail corruption and a lack of transparency in business practices, they are still seen as significant problems for foreign companies.
What Products Export well to China?
In fact, there are a lot of good sectors and opportunities to seize for foreign brands wishing to enter the Chinese market. A few years ago, it depended mostly on where you wanted to target your market. For example, sectors varied between the north and the south of China. Nowadays, thanks to e-commerce, you won’t have to focus precisely on a particular region as everything will be accessible across China.
- Beauty products and Personal Care: A must-have for Chinese consumers
China is the new powerhouse in global beauty. The country’s population of 1.4 billion people and growing use of e-commerce platforms have made it one of the most lucrative markets for cosmetics brands, who recognize China as an opportunity to grow their business exponentially.
With a 13.8% increase in 2019 compared to 2018, China’s cosmetics market is valued at more than 477 million yuan. On another hand, the monthly retail trade revenue of cosmetics in China has reached 27.22 billion yuan as of April 2021 and accounted for 340 billion yuan during 2020.
Even though foreign brands had little competition from Chinese companies a few years ago, the market is becoming more competitive, with the rise in popularity of domestic brands such as Florasis.
As local brands are winning over the market, foreign brands now have to be more innovative as well provide high-quality products if they want to stand amongst their competitors. The time where being a foreign brand was gold standard is over.
Skincare products are also very popular in China, both for men and women, with forecasted market size of 393.63 billion yuan by 2025.
The Chinese beauty industry is seeing a swift recovery since the COVID-19 pandemic. Despite beginning 2020 with less revenue due to decreased sales of products, consumers are now more than ever looking after themselves and have picked up a deeper interest in skincare. Thus, if you are specialized in beauty and skincare products, the market is waiting for you as long as you are motivated and ready to adapt to Chinese consumers.
- Fashion in China: One of the most promising markets for foreign brands
China has been the world’s largest apparel manufacturer and exporter over the past decade, but it hasn’t always had such a powerful role in fashion. After China joined WTO agreements on textile quota lifting back in 2000, their clothing exports boomed! Today they account for more than half of global production and 30% of all clothes sold worldwide. But Chinese citizens are now more inclined to purchase apparel from well-known foreign brands as the concept of face and appearance is predominant in China. The more expensive and fashionable their apparel will be, the more classy they will be according to Chinese society. Moreover, fashion is not only interesting for brands targetting female customers, but also for those specializing in menswear, a growing trend in China.
In short, if you want to export fashion products to China, you should seize the opportunity, but don’t forget that Chinese consumers are quite reluctant to buy from brands that they have never heard of before, so it is crucial to develop your online reputation as well before entering the Chinese market.
- Imported Food is growing in popularity, thanks to easier access
The Chinese import food industry is a lucrative and dynamic market. As the middle class rises, China’s demand for imported goods follows with an increase in their need for non-local products such as cheese, olive oil, chocolate, etc. As China’s economy continues to grow, many Chinese are becoming more and more aware of the potential dangers in their food. Along with this new awareness comes a desire for imported brands which is generally accepted as safer. The change among the younger generation towards Western brands rather than domestic ones has also greatly contributed to the rise in imported food consumption in China.
Now if we look at the most purchased imported products in China as of 2017, these products are clearly standing out (according to their number of transactions) :
- Meat: 295,000
- Edible oil: 33,000
- Dairy products: 77,000
- Sea products: 111,000
- Grain products: 100,000
- Alcoholic beverage: 272,000
- Candy: 102,000
- Non-alcoholic beverage: 132,000
- Dried nuts: 117,000
- Pastry and cookies: 83,000
Source: General Administration of Customs, P.R. China
You can find our full article here: The Strategic Guide to Export Food in China
- Water Bottles: The Chinese Market Looking for Safe Drinks
Bottled water is popular in China as it has a variety of benefits, including being free from bacteria and other harmful substances that may be found in tap water. In recent years, bottled water sales have increased which can be explained by the improvement of food safety standards as well as the numerous scandals plaguing the Chinese F&B industry. Bottles are convenient for all ages to drink (kids can use them with their own straws) and perfect for people who are going outside. If you go to China one day, the majority of Chinese citizens will say that they never drink tap-water – not even boiled tap-water – as it is too polluted and harmful for their health.
As a matter of fact, according to Statista, China was forecasted to grab 20% of the world’s market in terms of bottled water consumption in 2020.
With increasing rates by 5% over 10 years ago and 9% annually until 2021 this phenomenon has led to a very promising and lucrative market for foreign brands that are slowly taking the Chinese market. Surpassing America in 2013, China is now the world’s biggest bottled water market in terms of sales volume, reaching 208 billion RMB ($32.6 billion) in 2019, with a yearly increase of 9.5%. According to The Economist, China has experienced an increase from 19 billion to 37 billion liters of bottled water between 2010 and 2015.
You can find our full article here: Guide To Market Bottled Water Brands In China
- Foreign alcohol beverages in China are still popular among Chinese consumers
Chinese consumer demand for alcoholic drinks has been on the rise. In 2021, China’s alcohol market produced revenues of $291 million and is projected to grow annually by 4.96% in 2025- with spirit sales accounting for 42%. The increased consumption rates among Chinese consumers have led them to spend more than any other country–200 USD per capita yearly—which creates tremendous opportunities for foreign brands to tap into the market.
According to Statista, In 2019, China’s alcoholic beverage retail sales amounted to approximately 9 trillion yuan, representing 12% of the global retail sales. Meanwhile, in terms of consumption volume, China made up around 21% of the world’s alcoholic beverage consumption.
You can find our full article here: Guide to Sell Wine, Spirit, and Beer in China
- New-technologies, technological components and microchips
China’s exports are still a major driver for its growth, but it has been heavily dependent on foreign technology. In order to reduce dependence and help boost domestic demand in China going forward, the government is working hard at producing vital components domestically as opposed to importing them from abroad. This will make imports less of an economic force than they have been since before the 1980s when the Reform and Opening Up began.
The aviation sector is booming in China, with the construction of several airports per year. Therefore, China needs qualified workers as well as aircraft components and materials. For example, China is mainly looking for high-technology devices, but also components to make the fuselage, cockpit, empennage, and landing gear. Those require meticulous and precise know-how, which foreign companies are known for.
On the other hand, China is also purchasing every year hundreds of ready-to-use planes, especially for tourism but also in terms of military.
Things to know before exporting your products to China
Before entering the Chinese, here are a few things that you should take into account considering the fact that China is a completely different market and has its own specificities.
Understanding the Chinese market is key
First of all, don’t forget that China is very local, so you will have to dig into the weeds to find out the best price, the products that will fit Chinese consumers’ needs, habits, and trends. You also need to do market research to know how you will be positioned in the market, among both local and foreign companies, get to know your competitors, their price range, etc.
- Who is China’s largest trading partner?
China has developed a vast network of trading partners over the years following its booming economy. All trading partners are considered important to the development of the Chinese economy, however, the title of China’s largest partners are ever-changing due to national and international policy changes.
Nevertheless, we can surely say that at the moment, China’s largest trading partner is the U.S.
- What are the US biggest exports to China
According to Forbes, here are the most exported products from the U.S to China in 2019:
- The increase in soybeans and oil in 2020 was worth more than $10 billion of the total $18 billion increase.
- Computers chips ($2.01 billion),
- The machinery and parts to manufacture computer chips ($1.38 billion),
- Petroleum gases including LNG ($2.28 billion),
- Unwrought platinum ($1.68 billion),
- Cotton ($1.11 billion)
- Corn ($1.15 billion)
- What are Australia’s biggest export to China?
China’s import of Australian products has grown significantly over the past couple of years. Iron ore, gas, and coal account for more than AUD 79 billion worth of Chinese imports from Australia which is a significant improvement in trade compared to just last year when they only accounted for less than AUD 45 billion.
Why do Chinese people rarely reply to emails?
If you are attempting to communicate with a Chinese company, partner, or customer, it is important that they reply. This can be difficult as many of them seldom use email and prefer WeChat in both their personal and professional life (If you have attempted email marketing campaigns in China, you know what I’m talking about).
If you want to do business in China, then you’ll need a WeChat account. GMA can help you set up your own verified WeChat Business account, as well as help you with growing an engaged followers base.
Networking in China: Building and keeping a strong network is the key to success
One thing that is particularly important in China is your network. In China, people are considering others as business partners. This does not come as a surprise, but knowing the right person can immensely simplify doing business in China.
However, not every business entering China has the luxury of already having “guanxi” (network) that will help them set up and succeed in China. This is where the digitalization of China start to play an important role. You may not have the right connections at first, but by working on your online reputation, you will build a strong network while building a name for your brand in China.
Do I need to have a Chinese team?
If you consider marketing to big cities in China such as Beijing, Shanghai, Hong Kong, Guangzhou, etc, the language might not be the biggest barrier as those cities are very internationalized, but a localization effort will be highly appreciated. However, in smaller cities, it is recommended to work with locals or to hire people that are fluent in Mandarin Chinese, or Cantonese if you want to work in Hong Kong. It is particularly important to hire translators and interpreters if you are just entering the Chinese market and export your goods, as it will help you start with good basics and communicate easily with all partners.
Exporting to China: Regulations you Should be Aware Of
In order to export your goods in China, you will need to understand and comply with Chinese laws as well as respect some important processes.
Is it easy to export to China?
- China and its modern infrastructures
In terms of infrastructures, no need to worry. China is quite advanced in terms of technologies and infrastructures. Being the hub of the world, China’s government has invested in multiple infrastructures, with more than 270 airports, 268 green data centers, etc. You will be able to export goods in containers as China also has several international ports.
- China and its strict regulations
When it comes to regulations, China is extremely strict toward foreign companies, especially those selling food and drink products (understanble).
First of all, you should be aware that China’s laws and regulations for importing goods are constantly changing; not only do they protect public health, personal property, the environment – but also national security. If you want to export your product in China’s mainland then you should comply with The Standardization Administration of China (SAC) issued standards
China has five types of standards that vary based on location, company size, and industry:
- National standards
- Regional Standards
- Industry standards
- Enterprise standards for individual organizations.
- Association standards
What do I need to have in order to export to China?
- A Chinese Business Licence
You can go to this website for more information.
- Entry-Exit Permit
- Clearance documents: Go to the Chinese government’s website for more information, or contact us via email.
When exporting products to China, you will want to make sure they arrive on time and without any unexpected delays. To do this, it’s important that your Chinese clearance documents are prepared in advance and done so correctly. Preparing these items early can help ensure the product passes through customs as quickly as possible with minimal fuss or hassle. It includes:
- Commercial invoice
- Packing List
- Bill of Lading
- Labeling requirements in order to comply with Chinese regulations in terms of ingredients
Getting a Business License in China
- Do I need to have a business license to export my products to China?
Many new businesses in China are unaware of the regulations that apply to their industry. The business owner should always research what is required before they start spending money on materials and getting employees up-to-speed with this information. Some industries, like food production or medicine, require proper registration and certification before entering the Chinese market. Thus, it will depend on the industry you’re working in as well as other conditions (cross-border e-commerce, third-party, etc). However, in general, it is recommended to have a business license to make it easier.
Protecting your business in China is crucial
- Registering for your trademark in China
The following rule is CRUCIAL in China. Registering your trademark in China is mandatory if you want to enter the Chinese market without having to worry about your brand and products. China is in fact a first-to-file country. It means that the first company that will be registering your brand’s name of the product, will have to the monopoly of it. So, be careful: Trademark in China is the first step to consider before exporting to China. If you don’t follow the steps to protect your trademark in China, you won’t be able to get any justice, and nobody will be able to help you: you will have to pay the fine or go to justice in some cases.
- Having a Chinese name is highly recommended in China
The Chinese name you choose for your brand could be the difference between success and failure in China. Make a good first impression by choosing an appropriate, creative, and engaging name that will resonate with consumers from day one.
Exporting your products to China: How to do it?
The Distribution Model
Ex: Large distribution suc as Carrefour
or through specific distributors: In China, like in any specialized industry, you can find specific distributors. These are specialist distributors for all the country or by cities. They usually have their existing network of customers and offer them different types of products or services.
The traditional distribution model can be tricky for newcomers as buying agents are usually more willing to deal with suppliers already present in the market. The reason is simple: it is easier to sell products that already are popular in the country than products that are unknown to the general public.
But as we were mentioning earlier, no need to panic if you are not present on the market yet, there are solutions for you to set yourself apart and get the attention you seek from Chinese distributors.
Online distribution: E-Commerce is the Way to Go
- Selling through e-commerce platforms in China
First of all, it is important to know that China has a booming e-commerce market, and it is no wonder why. The country’s population of internet users is one of the largest in the world, as many people use online platforms to make purchases. With 44% of total retail sales coming from China alone, it is the fastest-growing consumer base for e-commerce, far beyond the U.K and the U.S.
If the online shopping industry in China is spiking, it’s not just e-commerce giants like Alibaba that are benefiting from it. According to a recent study by Tencent Research Institute, online shoppers in China spent over $1 trillion in 2019, and this number is expected to grow exponentially following the Covid-19 outbreak that has exacerbated China’s digitalization. Research shows that online shopping in China is on track to grow at a rate of 22% per year over the next five years.
As we can see from the above graphic, there were already 782.41 million online shoppers in 2020. China’s digitalization and the daily use of smartphones have greatly contributed to this trend as consumers are spending on average 6 hours per day on their smartphones.
Furthermore, following the Covid-19 pandemic, the growth of e-commerce platforms was even more important. It is estimated that by selling on e-commerce platforms, companies can increase their sales by 20%! In 2019, one-third of China’s GDP was due to added value from e-commerce – growing more and more as time goes on.
If we look at the most popular e-commerce players in China, we can see that Taobao is leading the way, followed by Tmall, JD.com, Aliexpress, Vip.com, and Kaola.
Each of these platforms is extremely useful for foreign companies but they are also very selective because of the number of businesses that want to sell their products online. In short, if you want to succeed on Tmall or JD.com for example you’ll have to make a real effort to brand your products in the country. Moreover, these platforms are very strict in terms of the quality of products, so you will have to comply with their rules and long application process. You can also decide to focus on Taobao or Kaola.
- Exporting your goods in China through cross-border ecommerce platforms
The Chinese population is eager to buy products online because they are more convenient and easier than shopping in stores. Although you won’t need a Chinese business license to sell on these apps, we strongly suggest you partner with an entity established in China that can handle legal matters such as obtaining necessary permits. For instance, Tmall Global pushes brands to work with TP, which are certified Alibaba third-party partners that handle everything from the registration process to logistic and customers service.
As its name indicates, cross-border e-commerce allows you to directly send your foreign products to China. Chinese consumers can buy those foreign products on specialized cross-border platforms such as Tmall Global, JD Worldwide, and of course, Kaola.
As a matter of fact, Chinese consumers are pretty confident when it comes to purchasing on cross-border e-commerce platforms as you can see from the above graphic.
Then if we take the example of Tmall Global, we see the most popular categories of products are beauty & personal care, food groceries and health supplements, and mother and baby care products.
- What are Chinese consumers looking for when shopping on e-commerce websites?
In the age of e-commerce, Chinese consumers are more than ever requiring trustworthy and accessible shopping platforms. Marketplaces provide verified brand stores that give consumers a one-stop shop for brands to get exposure and legitimacy in China’s growing market. Brands who want to conquer this territory will have no choice but be involved with these trusted online platforms or they’ll risk being lost in translation as their competition soars past them on search engines like Baidu (China’s version of Google).
Direct selling: Brick-and-mortar retail stores
It is possible to sell directly to the market, by establishing your company in China and employing staff to sell your goods in brick and mortar boutiques. This solution usually takes more time, requires more resources but can be considered more profitable in the long term.
The sale may be made through direct selling or installing outlets. The implantation of commercial-type structures in China has risen sharply and China will be the third destination of implantation.
Example: Revenues generated by the French companies operating in China reached 68 billion euros in 2019. According to the French Chamber of commerce and Industry: French exports to China had already reached 11 billion Euros in 2010, up 39.4% compared to 2010.
Selling through Chinese agents
If you’re looking to make an impact in China, it may be important for business owners to find a local agent. There are many agents who wish to represent foreign companies and these agents come with their own pros & cons. Some of the biggest agencies have the most services but smaller ones typically offer better services. You need to decide what is most valuable according to your needs and goals. Moreover, selling through Chinese agents allows you to avoid having to apply for a business license for example.
On the contrary, many SMEs have found it hard to hire local employees, which brings with its own challenges. But these businesses are finding that hiring an outsourced partner is a much simpler and less risky option for them. For example, some of them might be able to take care of logistics so companies don’t need to worry about customs clearance or transportation of goods on the ground in-country as well as managing international clients across different time zones – all frustrations associated with hiring locals who may not be able to communicate effectively outside the country due to the language barriers and culture.
Trade Fairs / Exhibitions: A Great Way to Engage with your Audience
How to find customers especially in B2B? Trade Fairs are the most popular way to identify and find new contacts in a specific sector. There are various kinds of trade fairs and exhibitions in China, in several industries. You can look on the internet to find some, or contact us if you are looking for a specific event.
For example, Vineexpo includes all wine professionals in Asia. This is a meeting place for all producers and distributors.
Exhibitions are also a great way to engage with your audience, especially for fashion brands that can expose their creations.
How to Successfully Export to China?
Whatever option you choose, you need to work on your e-reputation through digital marketing and offline event (salon and exhibition).
Adapting to Chinese consumers is key: Localization
50% of brands fail because they do not adjust their business to their target audience. In order to attract Chinese consumers, you need to understand the trends at that exact period of time and be reactive. In China, everything is going fast, so you have to go at a faster pace, and try to predict and change your plans according to their needs. You need to adapt everything in order to provide the best user experience possible as well.
For example, you can start by creating your Chinese website, which will be crucial for your ranking on China’s leading search engine Baidu.
A Smart Digital Marketing Strategy is Essential in China
Adapting your product to the Chinese market is a big challenge for many companies. The product sold may be packaged with great success in France, in Russia but will need to be redesigned for the Chinese Market. In most cases, the foreign company has to make changes, because the Chinese consumer lives thousands of miles from western consumers and it is, therefore logical that they do not have the same tastes, different needs, and a lot of expectations as foreign brands are in general more expensive than domestic ones.
Branding Your Product: China is a brand market, as usually Asian consumers are very attached to the brand of the product because of the concept of face and image. So the branding is essential if you want to convince Chinese consumers to buy your products.
Communication: Communication is probably the most important thing if you are just entering the Chinese market. You need to show and display your products, show to Chinese consumers what you have, in order for them to notice your brand. Your communication strategy must be adapted to the Chinese market, so it is recommended to work with experts. The main way of communication for brands in China is through social media: WeChat, Weibo, Xiaohongshu, Douyin, etc.
Marketing Tools: Even in B2B, business tools have are important. You need to take advantage of everything at your disposal in order to enhance your productivity and in the end, your ROI.
Internet: Chinese people are spending more and more time online, but having a website in Chinese is not enough to attract visitors. You have to work, communicate online, work on SEO.
Select your distribution channel: As I mentioned earlier, you have to choose a distribution channel for your products, a trustworthy distributor, or a proper way to distribute your goods, through cross-border e-commerce platforms for example.
Execution: the major problem of foreign companies in China is execution. The cultural gap between Westerners and Chinese is to take into account. But the major problem is that foreign companies are too slow to adapt and execute their plan for the Chinese market. In order to be successful, you need to plan everything beforehand and be reactive. At GMA, we are helping companies planning their communication, advertising, and marketing strategies while keeping an eye on the latest trends.
Contact us if you want to export your products to China
We have helped companies, from big international companies to SMEs, to successfully enter the Chinese market in the best way possible. To do so, we have more than 70 international experts that are specialized in a variety of fields, from food and drinks, alcoholic beverages, fashion, shoes, luxury, cosmetics, new technologies, video games, aviation, baby products, etc. With international experts as well as native Chinese experts, we know and understand the Chinese market. With more than 10 years of experience, we can help you identify your competitors, help you define the most appropriate strategies in terms of communication, advertising, and marketing. Thanks to our services, we will cut your time so that you can focus entirely on your marketing strategy with our marketing experts.