China imported $1.841 trillion worth of products in 2017. That’s 11.5% of all global imports. Over 10% of these came from North America.
China is one of the biggest marketplaces in the global economy. Selling your company’s products in China could be a great way to expand your business. Read on for an overview of how to sell to China.
Who Knows How to Sell to China?
Doing business in China is not straightforward. It’s clearly an attractive market not only in terms of scale but also Chinese consumers are getting more affluent. They are increasingly wanting consumer goods and more choice.
The trading environment is unlike any other. Government influence permeates right down to individual companies. The regulation and legal environment are also complex and full of risks. Add to this corruption and abuse of intellectual property and you are facing some challenges.
It is possible to sell to the China market and there are sources of advice and support. An international sales partner with experience of the market can ease the way. Alternatively, many states offer entrepreneurs help and advice with international trade programs.
What Do Chinese Consumers Want?
China is a diverse economy and one that has an increasingly affluent consumer base. Among the top products imported into China are:
- Electrical machinery
- Mineral oils
- Computers and mechanical appliances
- Ores, slags, and ash
- Precision equipment for medical and optical applications
- Organic chemicals
The range is diverse and offers opportunities for selling American goods in China.
Talking Their Language
When we talk about “talking their language” in a sales context even within the US we are talking about the cultural issues rather than language barriers. The cultural challenges of selling in China have to be addressed. It’s not enough to have bilingual support.
The scale of the country means that there are a diverse number of local languages and customs. Mandarin is the language of business. Don’t expect them to understand English so an interpreter is often needed.
Be careful with gestures as they can mean something different in China. Questions about marital status, age and income are regarded as personal and so may cause offense. Saying no directly, in Chinese culture, is embarrassing so don’t put your host on the spot.
Be Wary of Joint Ventures
A Chinese company may suggest a joint venture as a means of you selling to China. Resolving a dispute often has to take place in the Chinese legal system at some point, whatever the provisions of the contract. Take legal advice from lawyers experienced in Chinese joint ventures.
Selling Products in Chinese Markets
Selling American goods in China is possible through distributors or representative agents. Also, you can sell through a Chinese company by licensing products to them. American businesses expecting to do significant amounts of business establish themselves as a WFOE.
A WFOE is a “wholly foreign-owned enterprise”. There are costs to doing this including legal fees, trademark costs, and more. The Chinese government has minimum capital requirements to be deposited in a local bank account.
With the size of the opportunity, it’s tempting to rush in. Overconfidence and ambition are not enough.
Take some time to get it right and learn how to sell to China. This preparation and caution will pay dividends down the line.
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