Guide to Export in China

How to export your products to China?

One of the most recurring questions that foreign companies have – how to sell products or services to Chinese consumers. China has changed a lot over the last few decades. Whereas before, China was only seen as the factory hub of the world, today she is becoming a major consumer country, among the most dynamic in the world! Foreign brands need to understand this shifting dynamic in order to thrive in this new and ever-evolving market.

The market in China is unique and different. If you want to export to China, you have to understand consumer expectations before entering. Chinese consumers have become increasingly cautious and demanding with regard to their product purchases. Don’t think you can sell anything. We created this guide to give the main keys to exporting products to China: A strong brand, exposure, and e-reputation.

To export to China you need to Understand the market

If you’ve ever accessed the internet in China, you’ve probably noticed that it is really different from what you are using on a daily basis in the west.

The search engines are different, the only language is Mandarin, the codes and colors of web designs are different, the social media sites are not the ones you would typically use, etc. To succeed in China, you’ll have to master these tools. You won’t find your customers based on advertising on Facebook or Google for instance.

For your content to have maximum engagement with Chinese consumers, you will have to have a presence on Chinese apps and websites such as Weibo, and Wechat, and Chinese forums such as Zhihu, and also rank highly on the Chinese version of Google, Baidu.

This is what is commonly called Localization in Marketing. Use the available tools and adapt to the culture and demands of the country you are trying to penetrate.

Understand Chinese Consumer’s Behavior

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

China is being struck by scandals on a regular basis, and peoples naturally turn towards international brands that they can now afford. However, it is good to note that some Chinese brands have gained the trust of the public and this is a path that many other local brands will follow.

The raises of the Millennials generation has brought with it, its own lot of changes.

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

Chinese millennials are powerful in both Chinese and foreign marketplaces. They upset the economic and communication models, they are driving innovation. They are connected, love sharing economy models, travels, international cultures… Things you need to understand if you want to do business with millennials. This generation is YOUR current and future consumer don’t forget that.

There are more and more consumers in China

Every year the number of Chinese consumers is growing. They purchase more than they did ever before. The consumer market in China is expected to grow by approximately 12% every year in terms of US dollars to reach a value of $8.4 trillion by 2022. The new richer generation spends a lot of money. They actually enjoy spending their money on luxury products, traveling, or a good glass of imported wine.

The market’s potential is huge. The demand for imported products is skyrocketing and western brands are very much appreciated by Chinese consumers.

In December 2020, the value of imports to China amounted to around 203.75 billion U.S. dollars, according to Statista. As of 2019, China was the world’s third-largest importer of merchandise goods, representing 13.1 percent of worldwide imports.

What are Chinese consumers looking for buying imported products?

They are mostly looking for status. The concept of “face” or “Mianzi” 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. Wealth is crucial for social status in China, it literary opens doors.

The second criteria are quality and safety. Imported products are trusted to be safer than local products. In a country plagued by fake, this trust is a real opportunity for an international brand.

Chinese consumers are connected

China is the most connected country in the world. Chinese people spend an average of 2 and a half hours surfing on their smartphones every day. It is a common sight to see people absorbed by their phones while walking, driving, etc… and we understand why! The services available online in China are great and varied.

In China, you can do almost everything through your phone: pay your bills, buy tickets, order groceries, clothes, and others, entertain yourself, learn stuff, pay for everything, order a taxi, dinner, etc…

Brands in China have followed the same path and made their content available everywhere on the Chinese internet ecosystem. The idea is to develop interactions between the consumer and the brand with the help of smartphones.

Step-by-Step Guide to Export to 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 way but they are the most effective.

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

Direct selling on Chinese E-commerce platforms

Cross-border eCommerce: an entry door to china for foreign companies

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 allow brands to sell online without having a physical presence in China (what is so complicated!)

Setting up a shop on 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  Chinese e-commerce and to the habits of your targets. It is a great first step to starting your China dream.

But, be aware, you must also develop an effective marketing strategy in order to drive qualified and engaged traffic to your store as well as convert this traffic into sales. Without a strong brand, you may get as much exposure as any other successful brand and still fail because your conversion rate is too low.

Two things to remember for China E-Commerce: Traffic Acquisition and Conversion Rate.

Tmall: the fastest way to export and sell In China?

Tmall.com, also known as Tianmao Chaoshi in Chinese, is 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 accepts brands already well-known 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. However, Tmall Global just released an update targeting brands with low awareness in China and that want to test the market.

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 Cross-border eCommerce solution in China

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.

As 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 a 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 criteria are also necessary to open your business on JD. They are quite similar to Tmall’s criteria.

To register on JD global 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 entering 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 the 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 required 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

To Export in China, you need Wechat

More than 200 million users have linked their credit cards to their Wechat accounts. Users spend an average of RMB 500 (€ 64) a month on the WeChat e-commerce platform. It has become necessary for any brand which 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.

Sell on Wechat: 2 Solutions

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

You can create your mini-program 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 lives. They open it an average of 30 times a day.

Work with Chinese distributors

How to start selling through distributors in China?

If 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 (inefficiency, scams, copies …)

Yet it is possible to succeed with a Chinese partner.

What are the main key success factors?

How to find a reliable Chinese Distributor?

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

To build a distribution network in China, you first need eReputation

If you want to export to 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.

What does a Chinese Distributor want? Easy to sell products!

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 that makes a quick profit. They will never bet on a brand because it is promising, they will only do so if their products work.

The key to success in a distributor relationship is to be prepared. You need to do a lot of research, 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 in the Chinese market.

Market your company in China with Export in mind

Chinese distributors have no knowledge of marketing and branding. They are only focused on short-term and profit, not on development.

But in China, more than in other countries, you need to be visible. Marketing and branding are everything and you need to focus all your energy on them. 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 research before buying something and whatever the amount of the purchase.

Even for export purposes, Baidu SEO is a must

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. These keywords have to be smart and effective, you have to develop a strong strategy.
• Encourage positive comments and feedback from your consumers: the more positive comments you have better is it because Chinese consumers only buy by recommendations.
• Publish quality content to generate traffic on your pages.

In China Branding is everything (very true for exporters)

China is a brand market, chinese consumers are attracted by a brand, the image of the brand, and its products. Your brand needs to be strong and well-known 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 which have the main role today in commercial relations.

Localization is Key

You have to adapt your approach and also your products. You don’t have to change everything, 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 different and do have not the same needs, expectations, and habits.

Our Distribution and Exportation Services in China

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 selling 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 knowledge of Baidu’s functions
• An ROI-focused agency
• We are effective
• We worked with more than 300 western brands

Lead Generation Professionals

We are professionals in lead generation. To be effective in your lead generation, you need first to develop a good e-reputation. Investing in online advertising and creating quality content will help you develop your e-reputation. Finally, measure results to improve your performance.

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

Digital Marketing Specialists

• 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.

An ROI-Focused Agency

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

International Team

We are a French and Chinese team, here to help you develop 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.

Our experience & Case studies

Laguiole: high-end artisanal knife

A famous France handcrafted knife brand since 1860. Their products guarantee quality with the fantastic design of the knife. From them, you know a knife is not just a tool, but also an art piece worth collecting. Regards the increase in the Chinese market, they think entering in China market is a must to do. Due to the loss 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.

SOLUTIONS

• Taobao E-Shop
• SEO on Baidu

Get in touch with our exportation in China Experts

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 failed because they do not understand the stakes of the Chinese market.

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