It’s no secret that the Chinese market is one of the most lucrative in the world. For businesses looking to expand and grow, there’s no better place to invest. However, breaking into this market can be difficult – especially when it comes to selling your product or service. There are certain nuances and cultural sensitivities that you need to be aware of in order to make a successful sale.
So, how do you go about selling goods in China? Let’s take a look at some of the best practices!
Opportunities & Challenges for Foreign Companies when Selling in China
Growing Consumer Market
China presents a tremendous opportunity for foreign companies due to its vast and continuously growing consumer market. With a population of over 1.4 billion people, there is a strong demand for a wide range of products and services. The rising middle class and increasing disposable incomes have fueled consumer spending, creating a lucrative market for foreign businesses.
Unique Cultural and Regulatory Factors
Foreign companies entering the Chinese market must navigate unique cultural and regulatory factors. China has a distinct business culture, social norms, and consumer preferences that may differ significantly from Western markets. Understanding and respecting these cultural nuances is crucial for building trust and establishing successful business relationships.
Moreover, China has specific regulations and policies governing foreign businesses, including licensing requirements, intellectual property protection, and data privacy regulations. Adhering to these regulations and maintaining compliance can be a challenge, requiring a comprehensive understanding of the Chinese legal landscape.
China’s market is highly competitive, with both domestic and international players vying for consumer attention. Local companies have deep market knowledge and established networks, while international brands bring their reputation and quality standards.
Standing out in this competitive landscape requires a differentiated value proposition, effective marketing strategies, and a thorough understanding of consumer needs and preferences.
Language and Localization Barriers
Language and localization barriers pose challenges for foreign companies selling in China. Mandarin Chinese is the primary language spoken by the majority of the population, and while English proficiency is increasing, it remains limited in comparison.
To effectively engage with Chinese consumers, foreign companies need to invest in translation services, local language customer support, and localized marketing materials.
Localization goes beyond language and encompasses adapting products, packaging, marketing campaigns, and customer experiences to align with Chinese preferences and cultural sensitivities. It involves understanding local market dynamics, and consumer behaviors, and incorporating Chinese elements into the brand strategy.
Main Ways to Sell in China for Foreign Companies
When selling in China through a distributor, you can benefit from their local knowledge of Chinese business culture and established connections. A good distributor will be able to navigate the complex business landscape and help you build relationships with key players in the market.
Additionally, a distributor can take on many of the logistical tasks involved in doing business in China, such as arranging to ship and handling customs clearance, which can free up your time and resources to focus on other aspects of your business.
However, such a distributor is rare and difficult to reach out to! Truth be told, most Chinese distributors are looking to make quick money and will bet on companies that are already well established
It can be difficult to find a Chinese distributor to sell your product in China. However, there are a few things you can do to increase your chances of success;
- You can also reach out to local trade associations or chambers of commerce in China to get connected with local distributors.
- Another option is to contact export agencies in China that can help you connect with local distributors
- Lead generation through improving your online reputation combined with active prospection
We can help you contact Chinese distributors and find the perfect ones for your brand. We have a list of distributors for every industry and a long-lasting relationship with them. Contact us to schedule a meeting.
Sell Directly to Chinese Consumers
Direct sales mean more work from your side in terms of getting a business license and logistics, but the reward is total control over your brand in China and not having to rely on anyone but yourself. Plus, as we are going to see later in this post, there are simplified ways to sell products on the Chinese market to Western brands!
Sell in a Physical Store
Although e-Commerce has tremendously grown in popularity, offline shopping is still a staple for Chinese households. Indeed, we observe when looking at the different industries, that offline sales are holding up quite well against the soaring number of online sales and Chinese online marketplace selection. Here are some benefits of selling offline in China:
- If your brand has enough resources to open a branded brick-and-mortar store, it means that you are legitimate, and it will give you credibility with Chinese consumers.
- Enhancing the customer experience: Chinese buyers place a high value on the customer experience, and they are more likely to make purchases in physical stores if the experience is positive. A physical store allows customers to touch and feel the product, which can enhance their purchase decision.
- A physical store gives you the possibility to organize offline events.
The more “negative” side of the offline store, is its costs: rent, employee salary, and training. Sometimes, your offline store serves more as a vitrine than a point of sale – people discover your product offline and purchase them on your online store.
As a matter of fact, most brands are using an O2O strategy, meaning online to offline or offline to online. Using both sales channels to redirect and convert prospects into customers.
This brings us to our next point: e-commerce.
Enter the Chinese e-Commerce Market
There are many reasons why selling online in China can be beneficial for brands. One of the most obvious reasons is that it gives brands a much wider audience to sell to. When brands sell online in China, they are opening up their products to millions of potential customers who may not have had access to them otherwise.
Another reason why the Chinese eCommerce market can be beneficial is that it can help brands build relationships with Chinese consumers. Due to the fact that Chinese consumers are often reluctant to purchase from foreign brands, by establishing an online presence in China, brands can start to build trust and credibility with potential customers. This is something that is difficult to do without an online presence.
Now, with e-commerce in China, you have a couple of options:
- Sell on the classic version on the Chinese online market: You’ll need a Chinese business license, but customers won’t have limits on how much they can buy from you.
- Sell on a cross-border Chinese marketplace: No need for a Chinese business license, but you still have access to China online users. You can also start selling online in China without registering your company in China.
Cross-border E-Commerce in China
Cross-border e-commerce is the buying and selling of goods and services between two different countries. This can be done either online or offline, but increasingly, businesses are turning to online cross-border eCommerce in order to reach a larger audience and tap into new markets without fully committing.
There are a myriad of e-commerce platforms that offer cross-border options to merchants: the most famous online stores being Tmall and JD; For the sake of this article, today we will only be focusing on Tmall’s cross-border online platforms: Tmall Global;
The main advantage of cross-border e-commerce is that you won’t need a Chinese business license, therefore you won’t need a Chinese bank account, but you still have access to the same online payment method as a local business do.
However, you’ll be limited as to what you can sell and how much you can sell per buyer. It is a way for China to control and secure its domestic market.
Tmall Global Platform
Tmall Global is one of the most popular cross-border e-commerce (CBEC) to emerge from China. Its competitors Kaola.com and JD Worldwide ranked second and third, respectively. The top three CBEC’s market share has exceeded 60% of the whole market.
Consumers prefer to buy healthcare products and baby food in the United States, Australia, and Germany. Japan and South Korea are top choices for skincare products. Beauty skincare products are becoming the main consumption objects, accounting for 30 percent of Tmall Global’s total sales. Among them, Skin Care and color cosmetics products are the highest sales products under this category.
The post-90s generation is the main force of sales growth of Tmall Global as well as many small countries, as they are more open to trying new things.
Tmall (previously known as Taobao Mall) is the best Chinese website for online shopping for business-to-consumer (B2C) online retail, spun off from Taobao, and operated in China by Alibaba Group. It is a platform for Chinese consumers to buy domestic goods.
Alibaba Group has taken a step further with Tmall Global in cross-border e-commerce. It was officially launched on February 19, 2014. The main function is for international businesses to sell brand-name goods directly to Chinese consumers. The majority of goods on Tmall Global are imported.
All the e-commerce companies in China in Tmall Global are corporate entities outside of mainland China, with overseas retail qualifications. The goods sold on Tmall Global are produced initially or sold overseas and imported legally.
All Tmall Global stores have Chinese inquiry services and after-sales services available. Domestic consumers can use Alipay or other methods that can be used on the domestic platform, Taobao, to buy goods on Tmall Global. The strategy of Tmall Global is to be international and attract more global brands.
How to Successfully Sell in China?
There are a few key things to keep in mind when selling your products on the Chinese market – these could be great Chinese marketing strategies:
- Localized marketing – it’s important to tailor your marketing efforts to local preferences;
- Understanding the buying online in China process – Chinese consumers often value quality and price equally, and will often do considerable research before making a purchase;
- Meeting consumer preferences – Chinese consumers are extremely brand-conscious and often look for prestige and status in the type of products they buy; and
- Developing successful partnerships – forming strong partnerships with local distributors or companies is essential for success in China.
Because having a flagship store on an e-Commerce platform in China is not enough, here is some advice to increase your visibility and conversion rate in China and beat domestic brands!
Build a Strong Reputation Online to Sell Online in China
In China, brand reputation is an important purchase criterion. You have to do everything to always have a good image alongside Chinese customers. If you lose your reputation, you will lose everything.
You need to make sure that you get good comments for your brand on forums, social media, and other websites.
Chinese consumers only trust brands that have good comments and recommendations from friends or family and on media platforms. Don’t hesitate to engage our digital marketing agency which can help you to keep a good image and avoid all bad comments about your brand.
Chinese Website and Search Engine Optimization
The very first step of your journey in China should be developing your own website or webpage optimized for Baidu (and the great firewall) but also for China’s UX must, ultimately it will have to be mobile-friendly. You need a Chinese website for online shopping and for credibility, but also because it opens the way to SEO and SEM.
Note that, you should see your website more as a way to redirect your visitors to an indirect sales channel (aka Chinese e-commerce platforms) rather than as an online marketplace. When online shopping, consumers tend to prefer the large e-commerce platform that they trust a lot more than an individual website. Chinese companies are aware of this, but many Western companies still believe their website should be their main sales channel and thus put resources that should go elsewhere.
Baidu SEO is incredibly important if you want to make your website visible to Chinese internet users. Search engine optimization (SEO) helps ensure that your website appears as high up as possible on search engine results pages (SERPs), making it more likely that people will click through to your site.
Baidu is the dominant search engine in China, with a market share of around 70% (95 for mobile search). As such, it’s essential to optimize your site for Baidu if you want to reach Chinese consumers. This can be a challenge, however, as Baidu operates differently from other major search engines like Google and Bing.
How to Optimize Your Website for Chinese Search Engines:
- Make sure your website is in simplified Chinese.
- Make sure your website is well-indexed by Baidu. You can use the Baidu Webmaster Tools to help you with this.
- Use the correct keywords in your website content and titles. You can use the Baidu keyword tool to help you choose the right keywords.
- Optimize your website for mobile devices. More and more Chinese people are using mobile devices to access the internet, so it’s important to make sure your website is optimized for mobile devices.
- No Google plugins – Chinese users won’t be able to load any elements designed by Google
- Hosted in China (if your website has a commercial purpose you’ll need a Commercial ICP License, if not you can go for a non-commercial ICP License) or in a neighboring country for quick page loading.
SEO should be playing a consequent role in your marketing strategy – it is the most cost-efficient and long-lasting way of increasing both visibility and credibility. In a market where marketing costs can go up incredibly fast, foreign enterprises should definitely go for SEO.
Build Brand Awareness with Chinese Social Media Channels
There are a number of reasons why social media marketing is great for building brand awareness in China. First, social media platforms like WeChat and Weibo have huge user bases, providing brands with vast audiences to reach.
Second, Chinese shoppers are increasingly turning to social media for information about products and services, making it an essential channel for businesses looking to engage with potential customers.
Finally, social media allows businesses to target their messages very specifically, ensuring that they reach the right people with the right message at the right time.
Out of all the social media platforms available in the Chinese market, WeChat is something you definitely can’t miss. There are a few key reasons why Western brands selling products in China need to be using WeChat marketing:
- WeChat has over 1 billion users, making it the perfect platform for reaching a large audience.
- If you are not on WeChat with an official account, you won’t get the trust of consumers.
- WeChat is very user-friendly and easy to use, which makes it ideal for engaging customers.
- WeChat provides a lot of valuable features such as loyalty programs and payment capabilities, which help brands connect with customers more effectively.
- WeChat is constantly evolving and expanding, so brands can continue to rely on it for reaching Chinese consumers.
Chinese Influencers to Promote Your Brand
To gain visibility and e-reputation, it is crucial to encourage positive word-of-mouth. KOLs can help you.
The Key Opinion Leaders (KOL) are social media users who succeeded to make a lot of traffic on their accounts and became famous. Chinese consumers idolize KOLs and trust them more than brands. Some KOLs have millions of fans.
They are perfect to influence the mass population. You can influence consumers, by using KOLs as intermediaries. Through them, you are able to reach your target group. In other words, intermediaries can be a great asset in selling your imported spirits to Chinese consumers.
We Are Your Partner in Harnessing the Power of Online Distribution in China
In the dynamic landscape of the Chinese market, online distributors serve as the vital link between technology and business cultures. We understand the significance of online distribution and are here to support you in every step of your journey.
With our expertise, we can help you leverage the opportunities presented by online distributors in China. Whether you seek to collaborate with distributors operating on popular eCommerce platforms like Taobao and Tmall or explore the unique advantages of TMALL B2D, we have the knowledge and resources to guide you.
Our services extend beyond distribution. As lead generation professionals, we can streamline your prospecting efforts, allowing potential partners to discover your brand. By cultivating a strong online presence and investing in advertising and quality content, we’ll help you develop a reputable image that resonates with Chinese consumers.
For further insights, we offer additional resources on lead generation and effective advertising strategies in China. As an international team, we possess a deep understanding of Chinese consumers, their needs, and their habits. We are dedicated to supporting you in developing and expanding your business in China.
Let us be your trusted partner in harnessing the power of online distribution in China. Contact us today to receive a comprehensive presentation and begin your journey toward success in this thriving market.