Export to China: where should I start?

China is a key market for exporting businesses in the world

Exporting to China can be a lucrative but complex adventure in 2024 (not easy at all)

10-step guide to successfully entering the Chinese market, with a focus on marketing to find a distributor:

1. Analyze Distribution Channels: Study how similar products are being distributed in China. Look at the distribution channels used by your competitors and analyze their effectiveness.
2. Participate in Industry-Specific Trade Shows: Attend trade shows in China that are specific to your industry.
3. Leverage Online Marketplaces: Utilize established Chinese B2B online platforms like baidu B2B Alibaba or marcopolo to connect with potential distributors.
4. Utilize online Resources: Engage with professional agency that offer resources and networking opportunities for finding distributors in China.
5. Employ Strategic Social Media Marketing: Target potential distributors and industry influencers through Chinese social media platforms like WeChat , red etc
6. Offer Incentives: Develop attractive incentive programs for distributors, including discounts, marketing support, and exclusive rights options to encourage them to partner with you.
7. Create Tailored Materials: Develop marketing materials specifically for the Chinese market that resonate with local cultural nuances and business practices.
8. Negotiate : Be prepared to negotiate terms that are favorable yet competitive to attract and retain reliable distributors.
9. Clear Communication : Set up effective, clear communication channels to manage relationships with Chinese distributors, ensuring all parties are aligned.
10. Reputation: Continuously monitor your ereputation, super important to develop your distribution strategy

Each year, the Chinese consumer base is increasing. They are now purchasing more than ever before. China’s consumer market is expected to increase by around 12% each year in US dollars, reaching an estimated $8.4 trillion in 2022. The new wealthier generation spends a lot. They enjoy luxury products, travel, and a glass of imported wine.

The Chinese economy is on the rise

This market has huge potential. Chinese consumers are extremely fond of western brands and the rising demand for imported goods.

An Reuters poll of analysts released Jan. 13 predicted that China’s economy will grow 5.2% by 2022, according to a poll.

At the opening of the annual parliament meeting, in March, the government will reveal a growth goal for 2022.

Zhu stated that he was confident that China’s economy will grow at around 5.5% by 2022. He also said that 5-6% potential economic growth was possible.

China Top importation

Guide to Export in China

• Electrical machinery, equipment: US$548.7 billion
• Mineral fuels including oil: $267.6 billion
• Machinery including computers: $192 billion
• Ores, slag, ash: $180 billion
• Optical, technical, medical apparatus: $99.1 billion
• Vehicles: $74 billion
• Plastics, plastic articles: $71 billion
• Copper: $48.5 billion
• Organic chemicals: $45.6 billion
• Oil seeds: $45 billion

China had to be restrained in its monetary and fiscal policies for 2021, Li stated during Friday’s event hosted by China’s State Council Information Office.

China’s cabinet has committed to speeding up the issuance of local government special bonds in order to boost investment. Meanwhile, the finance ministry issued 1.46 trillion Yuan ($230.26 million)in the 2022 advance quote for local special bonds.

Chinese shoppers tend to use the “popularity”, and “total sale” rankings on online shopping platforms to find reliable sellers. These rankings are largely boosted by aggressive internet marketing or word of mouth.

Marketing is key to exporting in China

Chinese customers are passionate about leaving reviews for products they purchase online. Online reviews are a major factor in converting visitors to sales. Online maintenance is key to selling products online in China. You will be able to outperform thousands of other small players on a large online platform like Taobao by having a dedicated customer support and marketing team.

Most businesses find it difficult to manage an international online store in another language. Working with a competent, committed service provider is key to your success. Online retail channels are growing rapidly and are more convenient for businesses to reach the Chinese market.

Work on your E-reputation before pitching distributors

E-reputation is crucial for finding distributors in China due to the high value placed on trust and credibility in the Chinese business environment. Here’s why:

1. Trust Building: A strong online reputation helps establish trust with potential business partners who often rely on online reviews and social media to assess the reliability and quality of foreign businesses.
2. Brand Perception: In the competitive Chinese market, a positive e-reputation differentiates your brand, enhancing its appeal to potential distributors who prefer to work with reputable companies to minimize their risk.
3. Consumer Influence: Distributors are keen on partnering with brands that have a positive image among consumers to ensure the success of their sales efforts. A good e-reputation indicates a favorable consumer perception, making the brand more attractive for distribution.
4. Social Proof: Positive feedback and ratings on social media platforms and online forums act as social proof, reinforcing the brand’s market position and reliability, which are key factors for distributors when choosing to partner with foreign brands.
5. Market Entry and Expansion: A robust e-reputation supports easier market entry and expansion efforts, as distributors are more likely to engage with brands that are viewed favorably in the public eye and by peer networks.

Maintaining a strong e-reputation in China requires active management of online presence, engagement with customers, and addressing any negative feedback promptly to foster a positive brand image.

Cross-border : An entry point to China for foreign companies

Cross-border Chinese retail has never been better. Tmall & Jingdong (JD), the largest player, has a strong infrastructure.

Cross-border eCommerce platforms enable brands to sell online even if they don’t have a physical presence there (which is quite complicated!).

Brands can set up shops on China’s cross-border platforms to make use of Chinese payment methods and the delivery infrastructure provided by many of these platforms. These platforms make it easy for foreign brands to adapt their approach to Chinese eCommerce to the needs of their target market. This is a great way to get started on your China dream.

However, you need to create a marketing strategy to attract qualified traffic to your store and convert this traffic into sales. A strong brand is essential for success. You may be able to get the same exposure as other brands, but your conversion rate will not be high enough.

China E-Commerce has two key points to keep in mind: Traffic Acquisition, and Conversion Rate.

• Tmall: The fastest way to sell and export in China
• Tmall.com is China’s largest online retailer of B2C products.
• This platform offers a large variety of products, including clothing, food, and luxury shoes.

It’s difficult to sell on Tmall for many reasons.

Tmall accepts only brands that are well-known in China. Tmall Global (the trans-border part of Tmall ) targets companies with at least two years of experience and annual sales exceeding 100 million RMB ($33 million).

Tmall Global has also chosen an invitation policy. Merchants can apply for accreditation to the third party (TP) or join the platform. Tmall Global has made it more difficult to set up a store. Tmall Global has just updated its website to target brands that are not well-known in China, and who want to test the market.

You can use the platform to increase traffic and sales by using a variety of marketing tools. You can also get a warehouse service, but you will need a Chinese address.

• You will need the following to open your Tmall business:
• A registered entity outside of China.
• Qualifications in Wholesale and Retail Sales Abroad
• Own the brand/agency.
• Stock the stock you need.
• Tmall’s costs are prohibitive for small players. To be successful, you will need to develop a strategy and determine the cost of your product.

1. Security deposit: 150,000 RMB, EUR 20,554.
2. Technical costs: RMB 35,000 (EUR 4110), and RMB 60,000, (EUR 82214), per annum, depending on the type of store.
3. Commission: 0.5% to 5.5% depending on store type. Alipay fee 1%
4. JD Global: Cross-border eCommerce Solution in China
5. JD is China’s 2nd largest online direct selling platform. It owns and operates seven execution centers and 166 warehouses in 44 different cities.

Foreign brands can import their food, drinks, and footwear directly from other countries, just like Tmall. JD is a dominant player in certain areas, such as consumer electronics and home appliances.

JD also offers its Global system to foreign brands, which allows foreign traders and manufacturers to directly sell to Chinese consumers without having to have a Chinese address.

JD is an alternative to Tmall

JD Worldwide speaks a lot about its logistics networks, such as warehouses and next-day delivery programs. It also talks about its zero-tolerance policy for counterfeit products. This is an important issue in China.

You will need to meet different criteria in order to open your JD business. These criteria are very similar to Tmall’s.

To register for JD global, you need:

• A registered entity outside of China that has a capital greater than 500,000 RMB (EUR 67.908).
• Qualifications in Wholesale and Retail Sales Abroad
• Own the brand/agency you have authorized
• Stock the stock you need.

Franchise in China: a good option to develop fast.

Franchising: This allows suppliers to create a JD store, and then use JD warehouses for their products. JD takes all responsibility for customer service, storage, delivery, and delivery. This is good news for traders!

Business Partner License The seller has the ability to configure the store and complete the package in order to ship the order. JD will manage customer service and issue invoices.
Self Operation Partner A seller can sell on JD. The merchants must manage storage and delivery.

Your distribution strategy in China is important

Consider your distribution strategy carefully and reach out to potential partners. Canadian companies can jump into a Chinese venture without doing their research.

China Distribution: How to Find and Manage Distributors? (Done By expert)