Guide to Export in China

«How to export in China?»

 

This is one of the most recurrent question that foreign companies have. How to sell your products or services to the Chinese consumers.

China changed a lot, if before China was only «the factory of the world», today she is becoming a major consumer basin and the most dynamic in the world!
Foreign brands need to understand this changing.

The market in China is unique and different. If you want to export to China, you have to understand the consumer’s expectations before entering.
Chinese consumers have become increasingly cautious and demanding with regards to their product purchases. Don’t think you can sell everything.

We created this guide to give you some key to export in China. You will see the 3 main ways to export in China.

FIRST STEP : UNDERSTAND THE CHINESE MARKET

As I told you before, the chinese market is really different. Consumers use different channels and have different needs and habits. The key to succeed in China is to adapt your approach.

CHINESE CONSUMERS CHANGED

The increase of the middle class changed the consumption of chinese consumers. They have more money and they want to buy new products and are really concerned about quality.

That’s why, foreign brands are more and more appreciated, in China, they are synonym of quality.

The increase of the wealth also change people. A new generation who enjoy this increase is born : the Millenials.

Millennials are educated, independent and tech-savvy consumers. This population is, as their parents more and more rich. They can spend a lot of money for the things they like. They are more open-minded than all the other chinese generations. They are also really entrepreneurial.

Chinese millennials are powerfull on the chinese and foreign marketplaces. They upset the economic and communication models and drive innovation. They are connected, love sharing economy models, travels, international cultures… Lot of items you need to understand if you want to do business with millennials. This generation is YOUR current and future consumer don’t forget that.

A NUMBER OF CONSUMERS MORE AND MORE SIGNIFICANT IN CHINA

Every year the number of Chinese consumers is growing. They purchase more than they did ever before. The new richer generation spends a lot of money. They don’t mind spending their money on luxury products, traveling or a good glass of imported wine.

A GROWING DEMAND FOR IMPORTED PRODUCTS

The market’s potential is huge. The demand is quickly growing and western products are very appreciated.

To show you some figures : France’s exports to China have increased by 20% the last two years.

WHAT CHINESE CONSUMERS ARE LOOKING FOR WHEN THEY BUY IMPORTED PRODUCTS?

They are mostly looking for status. The concept of “face” or “Mingzi” is still very present in chinese life.

Imported products are more expensive than local products, so, If you are able to buy imported products, it shows to your peers that you have money. Money and social status are two very important criteria in China.

The second criteria is quality and safety. Imported products are reputed to be safer than the local products, in a country crowded by fake products.

CHINESE CONSUMERS ARE CONNECTED

China is the most connected country of the word. Chinese people spend an average of 3h surfing on their smartphones. Everywhere you can see chinese people focus on the screen of their smartphones and they never have a look around them.

In China, brands understand that and make everything available on smartphones. They also created animations to develop interactions between the consumer and the brand thanks to the smartphones.

HOW TO EXPORT IN CHINA

The priority for me as a consultant is to validate a marketing strategy, to prove and ascertain what will work by allocating enough budget to a number of areas and platforms in order to have enough data.

Then once brands know their stronger areas they can increase investment accordingly.

We will develop the 3 main ways to export in China. It’s not the only ways but they are the most effectives.

Let’s first talk about E-Commerce strategy and some of the key area’s to focus on.

E-COMMERCE PLATFORMS

CROSS BORDER E-COMMERCE PLATFORMS

Chinese Cross Border Retail has never been more developed. There is now a powerful infrastructure offered by the largest players such as Tmall & Jingdong (JD) (providing you have the budget) as well as smaller players such as ‘Little Red Book’, Taobao Global or WeChat Stores (to name a few).

Cross border e-commerce platforms allows brands to sell online without having a physical presence in China (what is so complicated!)

Setting up a shop on a China’s cross-border platforms allows brands to utilize Chinese payment methods as well as the delivery infrastructure offered by many of these platforms. It’s really convenient for foreign brands because these platforms allow you to adapt your approach to the chinese e-commerce and to the habits of your targets.

But, be aware, you must also develop an effective marketing strategy in order to drive qualified and engaged traffic to your store. Without traffic you can’t exist in China.

TMALL : THE BEST WAY TO EXPORT IN CHINA

Tmall.com, also known as Tian Mao in Chinese, is the China’s largest online B2C retailer.
The platform provides a wide range of products such as clothing, food, luxury shoes and many other types of products.

For many reasons, it’s not so easy to sell on Tmall.

First, Tmall only accept brands already well-know in China. Tmall Global (the cross border part) targets more generally companies with seniority of at least two years with annual sales approaching 100 million RMB ($ 33 million).

Tmall Global also opted for an invitation policy. That means that merchants are invited to join the platform or apply to an accredited third party (TP). This procedure has complicated the process of setting up a store on Tmall Global, which explains why JD Worldwide is a more attractive option because of its simplicity.

The platform provides a variety of marketing tools to help increase traffic and drive sales. They can also provide a warehouse service (but for this, you need a Chinese address).

To open your business on Tmall you need to have :

  • An entity registered outside Mainland China.
  • Qualifications in Retail and Wholesale Sales Abroad.
  • Be the owner of the brand or agency.
  • Possess the necessary stock.

The costs of Tmall are a bit high for little players, you need to first define a strategy and assess the costs to be effective.

  • Security deposit: 150,000 RMB (€ 20,554).
  • Technical costs: RMB 30,000 (€ 4110) or RMB 60,000 (€ 82,214), per year, depending on the type of store.
  • Commission: 0.5% to 5%, depending on store type + 1% Alipay fee.

JD GLOBAL : ANOTHER SOLUTION TO SELL ONLINE

JD is the 2nd largest online direct sales platform in China. The company owns and operates seven execution centers and 166 warehouses in 44 cities.

Like for Tmall, foreign brands can sell their food, beverages, clothing and shoes directly import from foreign countries. JD dominates some areas such as home appliances and consumer electronics products.

JD also has its Global system for foreign brands which allows foreign traders to sell directly to Chinese consumers without having a Chinese address.

JD Worldwide communicates a lot about the power of its logistics network (eg warehouses, same-day or next-day delivery programs) and its zero-tolerance policy for counterfeit products, which is seen as an important issue in China .

Different criterias are also necessary to open your business on JD. They are quite similar with the Tmall’s criterias.

You need :

  • An entity registered outside Mainland China with a capital of more than 500,000 RMB (€ 67,908).
  • Qualifications in Retail and Wholesale Sales Abroad
  • Be the owner of the authorized brand or agency
  • Possess the necessary stock.

3 ways of enteries are available for foreign brands :

  • Franchising Business Partner: Allows suppliers to build a JD store and use JD warehouses to store their own products. JD assumes all responsibility for storage, delivery and customer service. Which is a good thing for traders!
  • Business Partner License: The seller can configure the store and the complete package to ship the order. JD will oversee customer service and process invoices.
  • Self Operation Partner: The seller can sell on the JD platform. However, storage and delivery must be managed by the merchants themselves.

Here are the costs requiered to open your JD online shop :

  • Security deposit: 10000 RMB (1340 €) to 15 000 RMB (2055 €), depending on the product category.
  • Technical costs: 1000 RMB (134 €) per year.
  • Commission: 3 to 10% + 0.85% if the JD shipping service is used

WECHAT: THE NEW ELECTRONIC COMMERCE PLATFORM

More than 200 million users have linked their credit card to their Wechat account. Users spend an average of RMB 500 (€ 64) a month on the WeChat e-commerce platform. It has become ncessary for any brand wich wants to sell in China to be present on WeChat. Because if current sales are not as high as on Taobao or Tmall, the numbers are rising and WeChat’s resources seem inexhaustible when it comes to challenging competitors.

Export in China

ONLINE WECHAT SHOP: TWO SOLUTIONS

If you wish to be present on the e-commerce part of Wechat, two solutions are available.

You can create your mini-site which is directly linked to your WeChat Official Account. You can customize your interface to make it a bit more like your brand, advertise, promote and sell your products directly through the WeChat app. Payment is extremely fast and easy for users which has the advantage of generating a lot of impulse buying.

The second method is often favored by luxury brands or fashion. You don’t really have a shop on Wechat. Your official website is connected to the WeChat app. This allows you to keep your design and management system while enjoying the popularity of WeChat. If a user clicks on one of your products, he will be redirected to your website. This allows you to manage your online store by yourself. Your client will be able to browse and pay on the app.

You should know that Chinese users are addicted to the application. It is an integral part of their lifes. They open it an average of 30 times a day.

DISTRIBUTORS

HOW TO DEVELOP YOUR SALES THROUGH DISTRIBUTORS

You want to export to China, the idea is to find a distributor for your products … and you have probably heard about the crucial role of distribution in China, and all the problems related to Chinese distributors (inneficiency, scams, copies …)

Yet it is possible to succeed with a Chinese partner.

What are the main key success factors?

HOW TO FIND THE GOOD DISTRIBUTOR?

To find the best distributor your have to :

  • Have a strong brand (well-know, high turnover).
  • Know how Business works in China.
  • Master your communication in China.
  • Collaborate intelligently.

YOUR BRAND NEED TO HAVE A GOOD REPUTATION

If you want to export in China and attract distributors, you first have to work on your brand image and awareness. In China, it’s very common. Distributors will only have a look at your reputation and decided if they want to work with you or not.

THE EXPECTATIONS OF DISTRIBUTORS : MAKE MORE CASH

Don’t be naive, of course, the only goal of all the distributors is to make money!

Chinese distributors are very focused on the profits your brand can make, if your product has no commercial interest and does not meet their expectations, they will probably close your contract.

The chinese market is a huge market, competition is very high and distributors have many choices. They will only bet on the best horse, the horse who make quickly profit. They will never bet on a brand because it is promising, they will only do so if their products work.

The key to succeed in a distributor relation is to be prepared. You need to do a lot of researchs, to understand how the chinese market works and also how competitive it is.

The only way to succeed is a win/win solution. Your distributor will only be effective if he can make money. You need to be creative and fast to satisfy your distributor and have your chance on the chinese market.

MARKETING & COMMUNICATION

Chinese distributors have no knowledge of the marketing and branding. They are only focused on short-term and profit, no on development.

But in China, more than other countries, you need to be visible. Marketing and branding are everything and you need to focus all your energy on it. To export in China, distributors can help, but they are not the main solution.

Chinese consumers are very suspicious because of all the scandals that’s why they will always do a lot of researchs before buying something and whatever the amount of the purchase.

SEO TO BE RANKED ON BAIDU

First of all, you need to be ranked on Baidu. Baidu is the chinese Google. It’s the most important search engine in China.

To do SEO on Baidu you need to :

  • Have a website in mandarin and hosted in China : .cn
  • Use mandarin keywords to improve your ranking. This keywords have to be smart and effective, you have to develop a strong strategy.
  • Encourage positive comments and feedbacks of your consumers : more positive comments you have better is it because chinese consumers only buy by recommandations.
  • Publish quality contents to generate traffic on your pages.

BRANDING IS EVERYTHING

China is a brand market, chinese consumers are attracted by a brand, the image of the brand and the products. Your brand need to be strong and well-know to be popular in China.

Make chinese consumers dream, create cute stories to attract them.

And never forget that your positioning is important.

USE THE COMMUNICATION CHANNELS AVAILABLE IN CHINA

As I told you before, chinese people are very connected, they spend a lot of time online.

Having a website is not enough in China to attract your target, you have to work, to communicate online on all the social media available such as Weibo (Chinese Twitter) and WeChat wich have a main role today in the commercial relation.

ADAPTATION IS THE KEY TO SUCCEED

You have to adapt your approach but also you products. You don’t have to change everything, but just some details.

To export in China, your packaging or your product can be popular in Western countries, but maybe not in China. Most of the time, your need to modify a bit the packaging or product because chinese consumers are very differents and have not the same needs, expectations and habits.

OUR SERVICES

SEO EXPERTS

Our focus is to promote your business with your target closely in mind. After all my explanations, you understand that the key to sell online is to have a good image and to be reputable. We’ll use digital tools including: Baidu SEO and SEM, E-PR, Media Buying (DSP) & Community Management. Then, we’ll manage the campaign and assure its optimization & success.

We are experienced on Baidu:

  • High knowledges of the Baidu’s functions
  • A ROI-focused agency
  • We are effective
  • We worked with more than 300 western brands

LEAD GENERATION PROFESSIONALS

We are professionals of the lead generation. To be effective in your lead generation, you need first to develop a good e-reputation. Invest in online advertising and create quality content will help you developing your e-reputation. Finally, measure results to improve your performances.

We are lead generation experienced and we apply it to our agency. We get an average of 350 leads per month (March 2018) by applying the method we offer to companies that use our services.

EXPERTS IN DIGITAL SOLUTIONS

  • Website Creation, Development & Auditing
  • Baidu Search Engine Optimization
  • Social Media Marketing (WeChat & Weibo)
  • Reputation Management & Community Development.
  • Public Relations & Exposure in Chinese E-Media.
  • Analytics, monthly reports & analysis from our team of experts.

A ROI-FOCUSED AGENCY

We are a ROI-focused agency. The solution is to attract and also re-target the most qualified traffic in order to increase conversion rates.

A FRENCH AND CHINESE TEAM

We are French and Chinese team, here to help you developing your business in China.

We understand the Chinese professionals: their needs and habits.

We also understand the foreign brands’ difficulties when they tried to enter the Chinese market.

Each member of the team is specialized in a field. They have experience and they are effective.

AND IN BONUS

We are a friendly team, we offer the coffee if you book a meeting with our consultants to discuss about your project in China.

And trust me… our coffee is really good 🙂

OUR EXPERIENCE,OUR CASE STUDY

LAGUIOLE

A famous France handcrafted knife brand since 1860. Their products guarantee the quality with fantastic design of knife. Form them, you know knife is not just a tool, but also a art piece worth to collect. Regards the increasing of Chinese market, they think enter in China market is a must to do. Due to the less of know-how in the strange market, they come to us for their marketing program in China. After the analysis of their products and the local market, we suggested the most economic and useful solution for them.

export Laguiole case studies China

SOLUTIONS

  • Taobao E-Shop
  • SEO on Baidu

RESULTS

This project is still under the progress.

GET IN TOUCH

China is a market where opportunities are numerous, both for small and large players. But to succeed, you have to adapt your game to local demands and methods.

You must first do a lot of research and develop a smart marketing and communication strategy if you want to thwart the pitfalls of the market. 50% of the brands failes because they do not understand the stakes of the Chinese market.

Working with specialists in the Chinese market is the key to success.