How to sell Australian products to China
As the world’s largest economy, China presents a lucrative market and a massive opportunity for Australian business owners.
But the country also poses unique challenges that can wind up being costly if businesses don’t take the right steps before expanding offshore.
Here’s your quick guide on how to successfully sell Australian products in China successfully.
Can you sell to China?
Yes, plenty of Australian exporters base a huge amount of their business around trading with our Chinese neighbours.
But to target the country successfully, businesses need to be prepared for some challenges.
These include language barriers, low-quality distribution channels, difficult business relationships and diverse customer segments.
What can you sell to China?
Australian goods are very highly sought-after among Chinese consumers, and therefore as a general rule most consumer products can be sold there if approved on home soil.
But exporters need to be aware that new entrants are reporting stricter safety and quality regulations.
The challenge is often that regulations can change without notice and information is often difficult for foreign companies to find.
A good bet is to check in with the China Food and Drug Administration (CDFA) and the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) for up-to-date information.
Things to consider before selling to China
If you have set your sights on China then doing your due diligence, having patience and an aptitude for risk are essential.
Here are some further considerations for business owners thinking of taking the leap.
Online is a fastest way to break into the Chinese market, with an array of multi-billion dollar online retailers currently operating in the region.
These offer instant access to hundreds of millions of customers with the benefit of minimal setup costs, and some also cater specifically to international sellers, providing assistance with regulation, documentation and tax.
Tip: Check out Alibaba, Jingdong, Taobao, Amazon China and Yihaodian.
As an alternative to online marketplaces, businesses can export directly to distributors in China.
This is a more costly process – and is sometimes considered riskier – due to the need for arrangements with local suppliers, watertight trademarks and complex legal contracts.
Deals are also done mostly through personal relationships, so to get your foot in the door you will need to focus on cultivating a strong network.
Tip: Utilise existing China-Australia business councils to fast-track networking. Conferences and exhibitions are also a great way of connecting.
Pay your tax
Since January 2019, cross-border e-commerce companies are required to pay consumption tax. The general rate is 17%, but varies between product categories.
Unfortunately, it is notoriously difficult for foreigners to navigate China’s tax system, so seek professional advice and contact Austrade to find out the latest information.
Develop a Chinese brand
Culturally, China is wildly different from Australia and companies exporting there should consider localising and customising their brand.
Treat it like any new market and carefully analyse Chinese customer segments, product appeal and design.
Businesses also need a locally-hosted website in Mandarin that provides quality product information.
Much of the Chinese market doesn’t have access to western social media like Facebook, Twitter and Instagram.
Instead they use platforms like WeChat and Weibo, which have become an essential marketing tool that foreign businesses cannot overlook.
Offshore marketers are also increasingly targeting daigou – professional shoppers who purchase on the behalf of Chinese customers and are particularly useful in the beauty, health, fashion and wine product categories.
Like all countries, there are legal requirements and risks that sellers face when selling products to China.
Beijing is currently attempting to regulate all products coming into the country, with food, cosmetic and agricultural items a particular focus. These categories will require approval and documentation government authorities.
Safeguarding your intellectual property with the appropriate trademarks should also be a priority, and any contracts should be handled by experts that have a good knowledge of the country’s business landscape.
Many foreign products can attract tariffs or duty rates. Encouragingly, Australian exporters do benefit from the China Australia Free Trade Agreement (ChAFTA).
To find the latest rates and information on product and commodities impacted visit the Australian Government’s Free Trade Agreement Portal.
It is well-known that logistics are one of the most difficult aspects of selling into China, with few high-quality distributors available.
It’s not uncommon for packages to be delayed, go missing or arrive damaged.
Businesses have plenty of low-cost carriers available online but if you want surety, using bigger, well-known delivery providers like Australia Post is recommended if you’re happy to pay their higher fees.
If you are looking to move larger quantities, rather than individual packages, it is worth contacting the Australian Freight Councils Network for information.