Selling in China… How to do it?

Depending on your product or service, you’ll need to alter this list, but this can help you get started:

  1. Create a Chinese Company name and Chinese names for your key Products/Product lines
    (in modern mainland China phonetic translations rather than translated meaning is optimal. In Taiwan and Hong Kong, better to simply use the English names. for example, Chinese people can’t pronounce “Nike” so they say “nàikè”. In Mainland China it’s typically an operating flaw to use english for anything important)
  2. Chinese Language operational/interaction instructions
  3. For Business to Business products, Chinese can often accept USD pricing
  4. EMAIL is not a good lead generation tool for Chinese clients – but it is a good way to transfer attachments. Instead:
    • Exchange Business cards at Trade Shows
    • Engage in online communities
      (However, beware most active online community members lack the ability to buy)
    • Establish your own promotional seminars
    • Chinese language website with: Address, Phone Number and MSN information
      (Chinese people want to stop by or talk to a human about it, now)
    • Create service center to handle Phone/MSN/Walk In inquiries. Operating hours vary by product category. Staying open later in China is typically more useful than opening earlier.
    • Learn how to quickly identify customers who have the financial ability to purchase your products,
  5. China Customs is a very slow (typically delays shipments 3-5 days) so all efforts should be made to repair product in country
  6. Import Tariffs are very high, so don’t let product diverted from Hong Kong (0% VAT, 0% Tariff) compete with your Mainland China sales (17% VAT, 10+% Tariffs) and distribution plans.
  7. Be Careful: in Chinese culture “tricking” someone for your personal gain only proves that you are smarter than they are, and if a Chinese person has a good opportunity to make money that they don’t take (even if it is “wrong” in western eyes) then their friends and family would accuse them of being dumb.
  8. Be Aware: that the more that someone speaks a language, the better they get at it, and the less they speak one, the worse they get at it. When you meet the Chinese guy that speaks really great english and claims to protect you and “unlock a market of 1.3 billion customers” for you, most likely this guy is not connected at all and only knows how to trick western people out of their money.
  9. Legal system is unlikely to grant proper recourse, especially in native vs/ foreigner cases. You should always sign proper contracts, but if you are taking any risk on the part of your partner, YOU MUST REQUIRE A DEPOSIT (押金) in exchange for that risk. If the Chinese partner can save 1¢ by pretending the contract does not exist, then they will try it.
  10. Chinese customers are EXTREMELY PRICE SENSITIVE, and are particularly unwilling to pay for services.
  11. Long term, the Middle Men in China will be out of work, but in the short term, for most sales you are far better figuring out a way to with multiple resellers (avoid letting one crook control your destiny). Depending on volume and cash flow requirements, working with large stocking distributors is probably not the optimal way to operate because they have very fat margins, and with a fat margin it’s too easy for them to divert product back into your other markets. On the plus side, Agents can also keep you insulated from the darker side of Chinese business practices.
  12. Keep costs down. If you operate like a traditional international company while in China, it could be very difficult to make a profit, but all of your suppliers will take profits.
  13. Chinese customers want to hold the product in their hand and are particularly weary of Internet sales.

6 thoughts on “Selling in China… How to do it?”

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