Barsha Bhattacharya, 21 hours ago
Best Ways To Sell In China
Despite covid restrictions and geopolitical tensions, the Chinese market continues to be one of the largest in the world and is actively attracting foreign business. Under the new 14th Five-Year Plan, the Chinese government plans to intensively support domestic consumption and rising living standards.
This trend opens new opportunities for foreign companies and international brands that are going to promote their products among local buyers. Nowadays the Chinese economy demonstrates high rates of growth, especially related to the consumer retail sector.
Besides, we can detect a positive trend in the growth of Chinese imports, for instance, imports from the United States have been recovering in recent years, and imports from European countries are actively growing.
At the same time, speaking about sales in the PRC, it is worth considering the characteristics of Chinese consumers, a different business environment, as well as the rapid digitalization that affects marketing and promotion features in the country.
In this article, we will discuss the key factors that may ensure a successful start of selling.
First, it is extremely important to determine which niche you would like to specialize in. This is an important point that helps you understand who your ideal client is, as well as what marketing and promotion tools you will use.
A niche and a corresponding product you are going to sell to China let you determine your target audience. For instance, generation Y especially needs goods for pets, children’s products, and small household appliances.
Speaking of generation Z, this group is becoming a more significant driver of consumer activity in the country. For instance, young Chinese people are interested in spending money on cosmetics and fashion industry products, and entertainment segment products.
At the same time, nowadays modern Chinese consumers are agreed upon quality requirements and more often put emphasis on the quality of goods, product composition, ecological factors, etc.
All in all, finding a niche is tightly connected with finding your targeted audience and potential buyers, thus before entering the market, it is necessary to do professional marketing research to effectively compete with Chinese companies increasing your local sales.
For example, if you are an independent tableware dealer and want to sell your fine china and make the most money from china tableware, then do china dishware research.
Think about what item sells better to your potential buyer (highest price categories or used china tableware), what your competitive advantages are, for instance, in contrast to Replacement companies, collectibles auctions, dinnerware matches, and auction houses, pawn shops, etc.
What best prices will demonstrate value for your consumer and increase a purchase interest? Do your clients expect an attractive website with quality photographs and developed online sales channels?
Then, before starting to sell in the PRC, you should prevent some risks. The most significant one is trademark problems related to the necessity to protect your brand. For instance, there is the principle of “territoriality”: if your brand is registered in another jurisdiction, then nothing will prevent your competitor from registering an identical brand and beginning to sell it.
Another case is the registration of an identical trademark in a slightly different format. In particular, the name in Latin can be written in hieroglyphs: in this case, competitors can use your name and reputation for their own promotion in the market.
Another problem is the “first-to-file” regime: whoever first applied for a trademark registration gets the right to own it. Thus, when planning to enter the Chinese market, you primarily must as soon as possible deal with the issue of registering your rights to a brand or another intellectual property.
Besides, a relevant issue is registration in China. Some aspects of doing business with China do not include the necessity to register a legal entity in China, for instance, it relates to working with Tmall Global or Jingdong Worldwide.
However, if you are going to actively interact with Chinese partners or use other popular Chinese marketplaces, you must register a legal entity as an individual company or limited liability company.
In addition, your registration features will depend on economic zones including both regular economic zones and special ones.
It influences the time of document processing. For example, in a special economic zone, you can receive a Chinese business license in 30 days, whereas in a regular zone, the process can take up to 60 days, but the corresponding transaction fee is lower.
After that, if you want to sell your products, it is necessary to obtain an export-import license. It is also necessary to open a Chinese bank account that requires a business license, tax registration data, and other conditions, consider escrow capabilities, etc.
You should also remember some other specialties related to Chinese culture, for example, the importance of personal relationships, etc. Also, it may be more convenient for you to work with a Chinese phone number.
Regarding the fact that China’s system of payment works in other manners, you need to investigate such services as Alibaba’s Alipay and Tencent’s pay, and other items related to pay pattern issues. For instance, an Alipay account will be useful when you open a store in China’s online marketplaces.
China’s market is based on digital innovations influencing consumer behavior. In 2020, the number of active Internet users in China was 989 million, which is 3.4 times more than in the United States.
In 2021, e-commerce sales in China were about half of the world’s total e-commerce sales, and a quarter of the physical volume of goods in Chinese retail sold through online channels, which is above the global average of 18%.
Therefore, selling online and working with leading Chinese e-commerce platforms is the best way to start selling your products in China.
If you have registered in China as a legal entity, then it is possible to open a store on many popular sites such as:
A popular C2C online marketplace in China obtains some features of eBay and other popular western sites, focused on the general user and the sale of goods in various categories; it provides some options for sellers and customers such as determining best price algorithms and fast delivery.
Tmall is one of the largest B2C marketplaces in China, in contrast to Taobao it is more oriented to brand products and luxury segment, and opening a store takes more time
JD is A large Chinese site, focused on wide product categories many products, for instance, in clothing and electronics segments; it obtains a developed logistics system and is especially popular with luxury segment brands
If you have not registered in China as a legal entity, then you can work with some international e-commerce platforms, for example,
Tmall Global is an analog of the Tmall platform, focused on foreign business, to open your store for selling in the PRC you do not need to have a Chinese legal entity, as well as have an offline store in China and an account in a Chinese bank.
JD.hk is an international e-commerce trade site, like Tmall Global it has a developed transborder logistics infrastructure for foreign businesses; to open a store and start selling, it is also enough to have a foreign legal entity, as well as an Alipay account, a bank statement, etc.
Despite the Chinese market being large and continuing to obtain great potential, it is a quite highly competitive area. At the same time, traditional advertising’s impact on most people in China is quite weak.
For this reason, digital marketing in China is becoming increasingly important. It is supported by a wide group of social networks and other digital platforms that allow you to promote your brand effectively and help sell.
For instance, you can work with WeChat, which is not only the largest Chinese messenger and social network in which you can actively work with the target audience but also an e-commerce platform that allows you to create mini-applications for users who can make purchases directly in WeChat. Popular blog services like Weibo attract KOLs, their opinions are extremely important to Chinese users when they choose a product or service.
New marketing approaches are also offered on popular Chinese video platforms such as Douyin and Bilibili. In general, there are a lot of marketing and promotion channels in China, using them is crucially important to successfully sell your products in China, and the correct approach to that prevents you from paying top dollar.