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China will soon become the biggest importer of foreign products. I think this speaks for itself. In fact, foreign food producers pour in trying to grasp a share of the Chinese market.
You often read about larger corporations that make decent profits selling food here, but this doesn’t cut you off as an SME owner. There are great opportunities for smaller businesses to export food products to China, especially as it’s becoming more online-based.
In this article, I explain the essentials you need to know when exporting food products to China.
Why is the demand for food imports increasing in China?
Many people wonder why the imports of food have increased much in China the past years.
Many know that the middle class grows fast. With a population that’s around 1.4 billion people, it’s natural that a large amount of people tends to appreciate foreign products over time, at the same time as wealth increases.
Add on the food scandals that China has experienced in the past years, even resulting in deaths. With (nearly) every person walking around with internet access 24/7, information like this spreads fast.
Simply put: the Chinese have become more critical and suspicious which has resulted in more people looking for products to buy from overseas.
The Younger Chinese Generation Drives the Demand for Food Products
Also: especially younger and middle-aged people have started to appreciate foreign food. If you go for a Friday dinner, your friends might ask if you’re up for a meal at the Japanese Yakiniku restaurant close by or having American mini burgers.
The trend is shifting in China, giving foreign exporters great opportunities.
China Becomes More Online Based
The Chinese are the masters of using online services when buying different services and consumer goods.
Paying for taxis, groceries and haircuts with your cell phone is just a normal thing now. Ordering food through sites like Ele.me is convenient, but truly addicting (trust me, I’ve been there).
With a number of online supermarkets available, like Epermarket, it’s become easy to get all the foreign groceries you need, delivered to your front door. Do you miss cheese? Go to Epermarket. Need some olive oil? You know my answer.
Example of a Small Company Exporting to China
A company that has managed to penetrate the Chinese food market is Millu, which is a Swedish owned brand, started by two twins in their 30’s.
The reason why I know this company is because the owners are from the same hometown as me. A small city in Sweden with roughly 60.000 people.
This is just a proof that small companies can manage to export products in Asia, and specifically China, as long as you do your research, build up a network, and put in the work and time needed.
Establish an Online Presence
As you can see, even if Millu focus mainly on exports to China, they have a website in Swedish, promoting products to the Swedish (and other European) markets.
The truth is that you need to show that you have an established brand and a reputable website, before entering the Chinese market.
The Chinese do their due diligence and online research, they won’t simply buy foreign products just for the sake of it.
What food products are in demand in China?
While some food products are in higher demand in China, it doesn’t mean that you’re cut off from exporting other types of food. I just want to make this clear before continuing.
The following products are most popular in China with a market growing almost 15 times in the past decade:
Foreign meat is one of the most sought after products in China. Not only wealthy people look for substitutes for local meat, but also the growing middle class.
In fact, the Chinese don’t know much about local meat production, as scandals and information is often covered up by the state media.
It’s also well-known that cattle and livestock have higher levels of antibiotics and other chemicals, compared to places like Australia, Japan, the US, and Europe.
‘Aussie Beef’, Japanese fish, and chicken feet from Europe are just some examples of products in demand.
It doesn’t come as a surprise that dairy products are in big demand as well.
With a number of scandals the past years, like the melamine scandal in 2008 that resulted in the deaths of babies and infants, Chinese do everything conceivable trying to buy baby products locally or abroad.
And they are willing to pay much.
Nowadays, you can even find websites like Daigou, where people outside of China brings food from abroad and sell it online in China.
Empty shelves in Hong Kong
If you go to Hong Kong, it’s not rare that shelves with milk powder and other food products are empty, as people from the mainland go there to buy for their own family, or simply to sell online.
Cheese is also becoming increasingly popular as the Chinese have started to appreciate Western food.
Mozzarella cheese from Italy, Brie cheese from France, or cheddar cheese from the US can be seen in Carrefour, Walmart, or government-owned stores, like Ole, which only sells imported food.
Fish and Seafood
Even if the best caviar comes from China, and they’re a big exporter of crayfish to Europe, fish and seafood is in high demand.
Norwegian salmon and Japanese squid are not the only products in demand, in fact, China imports a lot of fish from countries like Mexico.
Keep in mind that Chinese food contains a lot of oil (compared to Thai food or Vietnamese food for example). There’s an easy way for restaurants or street vendors to reduce costs by using recycled oil (even if this is not a common practice).
Fruits and Vegetables
Fruit is imported in vast amounts. Apples from Japan, avocados from Mexico, or durian from Thailand are highly appreciated by the Chinese.
Regulations on the number of pesticides that farmers can use are not as strict as many other countries, like in the EU (which is controlled by EU regulations). Stricter regulations also apply in places like the US and Japan.
The fact is that: for some farmers, it’s natural to follow the local regulations and use a bit more pesticides, as you can increase your harvest and earn more money.
There’s a vast amount of food that is sold as preserves in China. Canned tomatoes, beans, foie gras, and corn are just a number of examples.
A benefit with preserves is that these products have a long expiry date and are fairly easy to transport over long distances.
I’ve personally witnessed how foreign liquors have become increasingly popular in China.
Scotch whiskey, German Weissbier, and French wine can be seen in most shops and restaurants in the medium-sized and bigger cities nowadays.
Craft beer is also on the rise and you’ll find many local bars serving their own beer.
Import Values for Various Food Products
As of 2017, the import values for different food products were as follows in China (in billions of US dollars):
- Meat: 10.21
- Edible oil: 10.19
- Dairy products: 8.52
- Aquatic products: 8.50
- Grain products: 5.19
- Alcoholic beverage: 4.80
- Candy: 2.42
- Non-alcoholic Beverages: 2.08
- Dried nuts: 1.17
- Pastry and cookie: 0.83
- Others: 4.37
Stricter Chinese Quality Standards Call for Awareness
Bear in mind that regulations get stricter for imports of food when higher quality standards are introduced by the Chinese government (due to food scandals and objectives to meet Western quality standards).
If you don’t follow the local regulations, you might end up with unsaleable products that either need to be sent back or destroyed. That’s not fun when you have invested a large amount of time and money.
To read more about regulations and certification, you can read my article about AQSIQ (The General Administration of Quality Supervision, Inspection and Quarantine).
AQSIQ is the organ under the State Council of PRC that manages inspections and certifications for imports of food and other commodities to China.
In addition to the above article, I recommend you to read my article about CIQ and the CCC mark, which is crucial when exporting to China.
Biggest Exporters of Food to China
According to the China customs, the following countries and unions export the most food to China as of 2017 (import value in billion US dollars):
- EU: 11.97
- USA: 5.29
- New Zealand: 4.87
- Indonesia: 4.54
- Canada: 4.49
- Australia: 3.08
- Brazil: 2.92
- Malaysia: 2.33
- Russia: 2.29
- Vietnam: 2.24
- Others: 14.25
Regulations when Exporting Food to China
It’s important that you understand the process when exporting your food products to China.
Below I’ve included the steps required if you’re a foreign exporter.
Register your Company with AQSIQ
If your products are on the ‘List of Food Imports Subject to Enterprise Registration’, you first need to register your company with AQSIQ.
Additional requirements usually apply to food products on this list, especially for dairy, health, and meat products.
You also need to register your shipments at AQSIQ online, for tracking purposes.
Prepare the Documentation Needed
There are a number of documents you need to prepare before you ship your products.
The documents should cover information about: your company, the location of your production facility, packaging, quantities, and product quality.
As the requirements differ depending on what food product you plan to export, I highly recommend that you contact a company that can help you with the preparation of the documents needed.
Documents Needed Include:
- Information about your company
- Information about the products you intend to export
- Reasons why your goods can be declared
- A safety compliance declaration, ensuring that your products conform to specific standards
- A quota certificate (if necessary)
- Bill of lading
- Sales contract
- Import license
- Inspection certificate
- Other quality licenses
- Hygiene / Health certificate
- Commercial invoice
- A detailed packing list
- Certificate for export from country of origin
And don’t forget to provide samples of the labels, both the original ones (in English) and the ones in Chinese.
Some products, like dairy and meat products, require that you get an AIL (Automatic Import License).
Additional requirements might apply for pre-import licensing to your specific products, therefore.
As mentioned, I recommend that you consult with a professional who can help you to prepare the documents needed in advance.
We’ve already covered labeling requirements when exporting food to China, therefore I won’t go into details here.
I recommend you to read the article to learn the essentials you need to know. For labeling, you need to follow China’s GB (Guobiao) standards.
CIQ inspection followed by customs clearance
After your products arrive in China, CIQ personnel will check your goods to confirm it includes the correct labeling and shipping documents required.
In case any documents are missing, the goods can be seized or in worst the case, sent back to its original destination.
If your goods get seized, you need to obtain a CIQ declaration or provide the missing documents.
My article about CIQ (see above) explains what documents you need when applying for a CIQ declaration.
Labeling Requirements when Exporting Food to China
One of the most common issues among exporters is that they don’t follow the labeling standards required.
To get your labeling approved, you need to provide the following:
- Import Food Labeling Verification application form
- The English label explained in Chinese
- The name and trademark (brand) of the product
- Weight and content
- Production date, storage instructions and expiry date
- Contact information to the manufacturer
- Contact information of the distributor
- Batch number
- Country of origin
How can I ship my food products to China?
The answer to this question varies as there are many different kinds of food that require different shipping methods.
As I explained in my article about exporting clothes to China, the by far most preferably freight option for clothes and textiles is sea freight, mainly due to two reasons:
- The products are generally not fragile
- The products are heavy
However, shipping food products like meat, vegetables or dairy products sometimes require a short transportation time, hence, air freight might be your best option.
The packaging is also of great importance, to make sure that the products will be kept under a specific temperature, all the way to the port and when the inspection is done.
A common way to keep the products refrigerated is to use dry ice and/or ice gel, that stays frozen for a time period of 2-3 days. You can buy these products yourself, or let a professional shipping company handle the packaging for you.
Keep in mind that dry ice is considered to be a hazardous material. Marking your packaging and get the permissions needed is crucial to avoid that the customs seize your goods.
Nowadays, you’re able to ship products in so-called reefer containers, that can keep temperatures at everything from -65 to +40 degrees Celsius.
So: if you’re an exporter of meat, for example, that don’t require your products to be in China in a week, using sea freight with a transportation company that offers services with reefer containers is probably your best choice.
For food products that are not perishable, such as oat, preserves, or alcohol, normal sea freight should be your option.
Can I sell food products online on Tmall Global or other platforms?
Previously, the most common way to sell food in China was to find local distributors who sold food products in physical stores (like Olé, just to mention one).
Truly speaking: it wasn’t uncommon that IKEA sold parts of unsold stock to other companies, who in turn sold their products to local supermarkets.
Nowadays, the easiest and quickest way to reach Chinese customers is through online platforms, like Tmall Global or JD (Jingdong).
In fact, food products are some of the most popular products on Tmall Global.
What to consider when selling food online in China
First of all, branding is one of the most important items if you want to get Chinese customers. Both the name of your product, the description and the packaging will determine whether you’ll succeed in China or not.
You can’t simply directly translate your product description from English to Chinese.
Remember that the Chinese often give food products as gifts, providing a bottle of wine in a tidy box can boost sales.
Setting the right price is also of importance, it all comes down to how you want to promote your brand. A more exclusive product? Then set a higher price tag (preferably including an 8 as this is the lucky number in China).
Food Fairs and Tradeshows in China
You can learn a lot and build up a great network if you visit trade fairs on-site.
The cost and time input won’t be much, compared to all the people you can meet and build up a relationship with.
Below I’ve listed some of the biggest food fairs in China.
Sial is the biggest food innovation exhibition in Asia and 4th biggest in the world.
Over 100,000 visitors went to the fair in 2016 and a record number of 3200 exhibitors put their products on show.
The show is held in May each year.
VINExpo Hong Kong (for wine & spirits)
VINExpo is one of the largest fairs, presenting wine and other spirits.
The fair is held in May each year.
BIOFACH is the leading fair for organic food in China. It’s a perfect place to meet new contacts, promote your brand and learn more about the organic food market in China.
The fair is held in May each year.
Imports of food increase at a rapid pace in China, in fact, the most imported food products have increased 15 times over the past decade.
As China will soon become the biggest importer of foreign food products, you have great opportunities to increase sales significantly by targeting this big market.
Previously, the most common option was to sell food to local distributors, which in turn sold the products in local stores.
A more common and easy option nowadays is to go online and sell food on websites like Tmall Global and JD, many foreigners have taken this path and increased their revenues.
Before you start exporting food, it’s important that you know about the local regulations that apply, what packaging to use, and how to ship your products. For perishable food products, like frozen meat, bread and cakes, air freight should be your option.
For non-perishable food products, like oat, cereals, and preserves, sea freight is a better option.
I highly recommend that you contact a professional that can help you with certifications, labeling, and other documentation needed.
How can you help me take the next step?
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c. Selling on Tmall, JD Worldwide & other platforms
d. Finding retailers and distributors for your products
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