Exports to China: WeChat, Baidu, Alibaba and Taobao

If China is a relatively unknown market for you, you need a clear market entry strategy. This may be different from the strategies you have used so far, as the market structure and the competition is different.

Key in your market entry strategy is some market research. Of course there are reports on market size and market growth, but often these are general. Specific knowledge on how your product is perceived and what your competitions is, is harder to get but more valuable.

Oppportunities for international business in China

China is the world’s most populous country, with over 1.4 billion people as of 2023. Known for its long history, rich culture, and rapid economic growth, China is a major global power.

With a GDP per capita of approximately $10,500 USD in 2023, China’s economy is one of the largest in the world. It has transformed from a primarily agrarian society to an industrial powerhouse. Manufacturing, particularly electronics and consumer goods, is a key sector. Services and technology are also growing rapidly.

China’s main imports include electrical and other machinery, oil and mineral fuels, optical and medical equipment, and metal ores, supporting its massive manufacturing industry.

THREE BIG PLAYERS IN CHINA FOR ONLINE SALES

There are three big internet players in China. Baidu is the main search engine provider, comparable to Google in the rest of the world. Baidu is collecting traffic data and offers products based on this data. Alibaba is best comparable to Amazon.com or Ebay and was first developed from B2B services of SMEs, and then extended to the B2C platform Taobao and Alipay, the online payment solution. Tencent focuses on social media applications comparable with Twitter and Facebook as manages platforms like Qzone and Wechat .

HOST YOUR WEBSITE LOCALLY IN CHINA

As a result of internet traffic monitoring by the Chinese government, locally hosted website load much faster than foreign websites, for which loading time can be 10 seconds or more. Keep in mind that all your Facebook, Twitter & Google plus efforts will have no or limited effect, as these websites are blocked for the Chinese.

Please be aware that Chinese website can have a very different look and feel from US or European websites. The information density is often much higher. Not all companies put so much effort in their website, so it’s relatively easy to stand out with a local Chinese website. You can link to your (international) corporate site. Make sure your local website if fully in Mandarin (and optionally in Cantonese) and can be found in Baidu.

WECHAT IS THE MOST POPULAR SOCIAL MEDIA TOOL

WeChat has functionalities that combines Whatsapp (instant private messaging), Skype (free voice and video calls) and Twitter/Facebook (sharing content). Apart from your personal account you can set up a so called public accounts, both as a private individual or as a company. These public accounts can have many followers and it’s easy to share info, links, pictures and even offer products or services, WeChat even has a payment function.

A HUGE E-COMMERCE MARKET THROUGH ALIBABA AND TAOBAO

The Chinese market can’t be reached with Amazon.com and other ‘Western’ internet platforms. But there is a whole ecosystem available with websites as Alibaba and Taobao as the front end, with payment options for the Chinese, feedback possibilities, and there are many service providers for the local storage, packaging and delivery of goods.

With over 1,5 billion people in one market, with more or less the same regulations and the same time zone, there is a huge supply and foreign goods and services are just a fraction of the total offering. So everything is in Mandarin, and you’ll have to provide all your information and commercial texts this way.

In Taobao you can have your own store and build your corporate identity there as an alternative for a Chinese website. Taobao has its own search system, and in general Taobao products can not be found in Baidu. In order to get your products promoted, there is a pay-per-click system to get them on more attractive spots.

Five ways into a market

Your entry model decides your cost, your speed and how much control you keep: sell directly from home, work with an agent, appoint a distributor or importer, sell online, or open a local office.

Control and investment move together. Direct and online selling are cheap to start and easy to stop. A local office gives full control, but needs staff, registration and often a local company.

Most companies start light, prove that there is demand, and only then invest.

VAlidate the HS-codes you use for shipping

Almost every country or trade block in the world has its own detailing on the international HS-code list. With our report you strongly reduce the risk on misclassifications, delays and higher custom duties than expected.

Tell us what you want to ship and where to and we ask you all relevant questions to get to the most likely code.

Get your HS code VAlidation Report for only € 39

Entering the market in China in three steps

Step 1

Validate the demand

Check market size, competitors and price levels, then speak with five to ten potential buyers. Their reaction tells you more than a general market report.

Step 2

Choose channel and price

Pick the entry model that fits your margin and your capacity, and calculate your landed cost: transport, duties, VAT and the margin the channel will take.

Step 3

Pilot, then scale

Start in one region or with one partner, agree what success looks like after six to twelve months, and expand the country plan only on those results.