China is the biggest consumer market in the world and increasingly more companies want to grasp some of its market shares. Even if Southeast Asia sees great growth with many export opportunities, China will continue to import a significantly larger amount of goods.
Exporting to China is not the easiest task on hand though and requires thorough planning, financing, and patience. This is a reason why I often suggest companies exploit other markets, before turning to the Chinese ditto.
In this article, I go into greater detail and explain how you can export products to China. If there’s anything you wonder about, feel free to write a comment below or contact us directly.
- Which products are in demand in China?
- Top eCommerce Platforms
- Trade Fairs for Exporters in China
- Shipping & Logistics
Which products are in demand in China?
In this article, we focus on the imports of consumer goods that are sold B2C in China. Besides, we will primarily review how it works when selling cross-border online.
Let’s take a look at the most popular product segments and what opportunities each brings.
Fashion & Clothing Products
Fashion & clothing products are undoubtedly one of the most popular product categories thanks to China’s young population. According to McKinsey, China overtook the US as the biggest fashion market in the world in 2019, which speaks for itself.
Louis Vuitton, Chanel, and Gucci remain the most popular luxury brands but we also see an increasingly bigger demand for fast-shopping and light luxury products.
Companies such as Zara and Uniqlo still have a strong presence in the country and particularly popular among the younger generation.
In the past years, the eCommerce industry has grown rapidly and the Chinese are no longer afraid of buying luxury products online.
Mom & Baby
Mom & baby products is another big category that accumulates for a large part of China’s imports.
Chinese like high-quality imported products such as milk formula, diapers, and other baby food. One of the key differences between Western countries and China, for example, is that around 75% of all Chinese mothers feed their babies with formula, creating a huge market.
We also see a great demand for baby clothes, baby furniture, and toys. In the past years, the market has grown around 15% per year, which is a remarkable number.
Beauty & Cosmetics
China’s young and female population is huge in comparison to other countries and they’re not afraid of spending large amounts on beauty and cosmetic products. Foreo Luna is just one example of beauty products that have seen great success in China.
At the moment, skincare products have the largest market share of around 55%. Haircare products come second with 19%, while cosmetics snap the third spot at around 15%.
Food & Beverages
The Chinese crave foreign food and beverages including everything from meat, dairy, oils, liquors, preserves, fruits, and vegetables.
The US, for example, is the biggest exporter of soya beans, even if the exported amount has dropped by around 75% in recent years due to trade tensions.
Worth mentioning is that exporters typically find local distributors for food products as these can be hard to sell online, especially cross-border. By importing the products to China, you also have the option to sell them on local eCommerce platforms such as Tmall Classic.
Some interesting trends we have seen in the Chinese food industry are:
- Chinese order significantly more take out food
- More snacks and small bites
- More health food
- Less meat and more vegetables/vegan food
People here are getting more health-conscious, something that foreign exporters should be aware of.
Vitamins & Supplements
As the Chinese become more health-conscious and due to its growing population, we see an increased demand for vitamins and supplements.
With that said, supplement products bring similarities to food products as these can be more difficult to import. In 2015, China introduced the Food Safety Law of the People’s Republic of China, saying that you need to register and file your products with the CFDA (China Food and Drug Administration).
You need a Chinese agent helping you with the matter.
Thus, many foreign companies look at cross-border channels instead as these offer fast-track to the Chinese market.
Top eCommerce Platforms
Chinese is the home to multiple eCommerce platforms that fight head-to-head to grasp market shares. Below I have listed the top websites available to foreign sellers.
Tmall was founded as early as 2008 and is owned by Alibaba, one of the biggest companies in China. The company also owns Taobao.com, the biggest eCommerce website in China, and Tmall was launched as a more high-end alternative to Taobao.
Besides, Taobao has mainly catered to C2C (consumer-to-consumer) sellers while Tmall primarily focuses on B2C (business-to-consumer).
The cross-border version of Tmall is called Tmall Global, which allows you to ship products directly from overseas or a China Free Trade Zone to Chinese end customers.
Over the years, it’s become increasingly difficult to sell products on Tmall, a reason why many foreign companies have to work with Tmall Partners. Thus, it’s important that you have sufficient brand awareness, sales, and an international presence.
JD is partly owned by Tencent and the second-biggest eCommerce website in China. Historically, it’s the biggest competitor to Tmall.
Recently, the two have moved the competition to Southeast Asia as well where Alibaba owns Lazada and Tencent owns around 20% of the shares in Shopee.
Compared to Tmall, JD attracts more male buyers and it’s generally easier to start selling on the website. Entry and running fees are lower and the requirements not as high.
The cross-border version of JD is called JD Worldwide and brings many similarities to Tmall Global, even if there are more products available on the latter one.
The same as for Tmall Global, foreign brands often need help from local eCommerce partners and/or marketing agencies to launch their brands on the platform.
Kaola is the biggest website for cross-border sales and was initially created for Australian products. It grew beyond that and is currently the go-to website for purchases of food and beverage products.
Kaola doesn’t only let foreign sellers open online stores on the website, but also reach out to foreign markets directly, scouting new products. Examples of companies that sell on the website include:
Vipshop has a different business model to the above websites as they focus on selling discounted products. In short, this means that larger brands sell their products to Vipshop with discounts, which benefits buyers.
Since its inception in 2008, Vipshop has grown incredibly fast and was the highest valued eCommerce website in China. A great majority of the buyers are female and many live in smaller, so-called third-tier and four-tier cities.
Vipshop is a stock-listed company that continues to remain a major player in the eCommerce market.
Taobao is the oldest eCommerce website and was started by Alibaba Group. It’s not a cross-border eCommerce website but only focuses on local sales. Thus, you need to have a Chinese company or work with an importer when selling here.
Even if Taobao has premium products like Gucci, it’s mainly known for its wide assortment and low prices. Taobao will most likely not be your first option if you’re a foreign brand that wants to enter the Chinese market.
Trade Fairs for Exporters
If you want to do more research and learn about the Chinese market, it can be wise to visit one or more trade fairs. Here, you can connect with other sellers, get market insights, and learn about the local market.
Below I have listed some of the biggest trade fairs available for exporters in China.
China International Cross-Border eCommerce Products Fair (CIEFAIR)
CIEFAIR is the biggest cross-border eCommerce fair in China, hosted in Shenzhen.
As many as 100 cross-border eCommerce factories visit the fair to find potential buyers. More than 500 exhibitors that work in the eCommerce industrial ecosystem, including eBay and Amazon, and many other famous platforms worldwide now visit the event.
There’s a reason why the fair is held in Shenzhen as the southern parts of China accounts for 70% of cross-border eCommerce. There are as many as 150000 cross-border sellers of various sizes in Shenzhen and a third of China’s Amazon sellers are located in Shenzhen.
Some key facts about the fair:
- Exhibition Space: 75,000+㎡
- Exhibitors: 1,800+
- Visits: 140,000+
- Forums & Activities: 70+
SIAL is China’s largest trade fair for food and beverages and it welcomes over 100,000 persons each year. It’s been around for a couple of decades and a perfect venue for overseas brands to network and learn more about the market.
Foreigners that visit the fair primarily come from Korea, Russia, Brazil, Austria, Argentina, USA, Turkey, Spain, Poland, and Germany.
Over 3,500 exhibitors visit the fair and the main products on display are meat products, dairy products, and beverages.
Key facts about the fair:
- City: Shanghai
- Visitors: 100,000+
- Exhibitors: 3,500+
- Venue: National Convention & Exhibition Center, Shanghai
CIIE (China International Import Expo) has been held since 2018 and is the biggest trade fair for imports in China.
It was launched by the government to increase the imports and consumption of foreign products. They also want to improve the technology in the country.
Examples of products displayed include:
- Food and Agricultural Products/Automobile
- Intelligent Industry & Information Technology
- Consumer Goods
- Medical Equipment & Healthcare Products
- Trade-in Services
Foreign organizations who support the event include:
- World Trade Organization
- United Nations Development Programme
- United Nations Conference on Trade and Development
- Food and Agriculture Organization of the United Nations
- United Nations Industrial Development Organization
- International Trade Center
Shipping & Logistics
Before you start selling in China, you must have a robust shipping solution that helps you save as much money as possible. If you sell cross-border to China, you typically have two options available:
- Sell cross-border from Hong Kong or overseas
- Stock the products in a China bonded warehouse
The major cost driver won’t be for the bulk shipments to Hong Kong or mainland China, but the last mile delivery and product handling at the warehouse.
Below is an example of the different costs calculated for face masks sent to Hong Kong for fulfillment and later to mainland China:
- Bulk Shipment Fee = 4.4%
- Storage Fee = 9.4%
- Warehouse Handling Fee = 30.1%
- Delivery Hong Kong to Shanghai = 56%
The total shipping per product was around USD 6.
If you plan to sell in China long-term, using a bonded warehouse can be advantageous as you will be able to reduce your shipping costs a lot. In some cases, sellers can save 50% or more in shipping costs compared to Hong Kong fulfillment.
For a better overview, I have included some more information about the pros and cons of using China bonded warehouses and Hong Kong fulfillment centers.
Hong Kong Fulfillment: Pros and Cons
- No tariffs when shipping products for storage in Hong Kong
- Easy and fast to register a Hong Kong company
- A good way to test the Mainland China market for your products
- Generally more expensive pick & pack fees and storage costs
- Slower delivery times
- Goods can be held up in customs (and are subject to changes)
- Chinese consumers are subject to an annual quota of duty-free cross-border retail imports
China Bonded Warehouse: Pros and Cons
- Pre-declared goods, quicker to clear customs
- A higher-order value accepted
- Lower risk of orders being held (assuming full compliance)
- Lower cost of pick and pack and storage
- Can use local China couriers to deliver (cheaper)
- Requires a bonded truck to bring goods into bonded areas (min. 1 truckload, around RMB 1,000 from PVG, RMB 2,000 from Yangshan Sea Terminal in Shanghai)
- Not a good option if you intend to ship to other countries in the region (from the same stock)
- Stringent inventory records, any differences may result in charges
- Pre-declaration required and changes in sales price required to be declared to the customs
Below I have included some commonly asked questions and our replies.
Do I need a Chinese company to sell in China?
If you plan to import products and sell on local eCommerce and retail stores, you need to open a Chinese company or work with a Chinese distributor. With that said, you can also sell cross-border online which doesn’t require any Chinese company formation.
What are GB-standards?
GB-standards (referred to as 国标, Guo Biao in Chinese) are Chinese national standards issued by the Standardization Administration of China (SAC), the Chinese National Committee of the ISO, and IEC.