Have the dream to sell in China?
Tired of seeing everything in your home country as “made in China”? Hoping to level the playing field and get Chinese consumers to see “made in my home country” on their products?
Then you are in luck, Chinese want your products!
But which product to choose, and how to know if it will be a hit?
Today I’ll brainstorm some ideas with you and let’s get you some inspiration!
When you are starting your research, its best to break things down into industries or categories. Here are some of the more popular categories I have noticed the seven years I have been over here in China.
McDonalds, KFC, Starbucks – you see them throughout China. Chinese people trust the quality of Western food. Chinese have bought into the convenience of fast food and want that instant gratification.
It isn’t just for the large fast food chains either. Throughout Taobao (the Chinese eBay) you can find plenty of small branded imported foods selling well online. As the Chinese consumer is more educated on foods from foreign lands, they want to incorporate that in their daily lives.
If you have the opportunity to represent a quality food manufactured in your home country, it sounds like a good chance! Find one that isn’t Chinese are buying, but isn’t marketed direct. Find that then I’d recommend giving it a fair shot.
Health: Vitamins and Supplements
Like food just mentioned, health goods are hotter and hotter in the Chinese market. As the middle class continues to emerge, they want to keep healthy and consume the vitamins and health goods Westerners get.
Sure, there is the standard traditional Chinese medicine and health goods, but today’s generation wants what Westerners have. Maybe it’s the American movies and TV shows they love to watch that influences this decision making.
Good news for you, there is a demand.
The challenge, getting it into China. These types of goods have strict regulations and are hard to get classified. I’ve talked to a lot of business people who went down the supplement road only to find roadblocks in the importing process. Have you tried? I’d love to hear your experience if so.
As a father myself I understand the feeling. There have been a few scandals of product quality in China (heck, even outside of China) that have caused Chinese consumers to trust Western goods more for their baby.
Things they eat such as baby milk powder, to diapers, to pacifiers and toys – a Chinese parent trusts those made outside of China. The craziest I have seen (and I speak from firsthand experience here) is the Made in China products we to America, only to be re-imported to China and sold. That is because the products went through more rigorous quality control procedures.
A comedian or singer? You can “import” yourself to China and sell your skills! As the Chinese economy grows and matures, the middle class want to live and enjoy life as does the West.
So give them what they want, and get up on stage! Chinese people love live events, whether that is singing at a restaurant or doing a live comedy act before a industry summit. Get creative here, even if you can’t sing, there may be other types of entertainment you can do.
Another idea that tempts me to enter is to be an agent for Western entertainment. I do get requests every once in awhile from a Chinese company or event organizer who wants to get some “exotic” entertainment from USA or Europe. While of course they can find local Chinese talent, it isn’t as “special” to the crowd and by having some specialist from overseas it makes their event that much more premier.
So whether you are the entertainer or you are a natural connector and agent, you can leverage importing people into China. Fill the desire to have more international live entertainment in the region.
China just recently announced that they will be lifting the one child policy. And everyone is talking about having another baby. That is going to explode the population, and the education system!
Even before this policy change there is a huge hunger for learning. I’m witnessing it firsthand with my own child here, he loves learning and the family encourages the child to absorb everything.
Money is no object when it comes to a quality education. Chinese people are sold on the idea that a Western education is a better quality experience than those in local Chinese schools. From before the kid can crawl the discussion about sending the child to overseas college is a discussion. Believe me, I have been in that discussion with my wife already!
From preschool all the way up to postgraduate studies and professional industry exams, there are still huge opportunities for foreigners to come to China and cash in. The Chinese government wants its people to “level up” and move from a blue collar to a white collar society, and that will take a lot of marketing and management training.
I can picture any kind of business opportunity around education in China will be a money maker. Sure, you need to commit, and have some kind of an operation and presence here in China, but it will pay you back ten fold if you execute and focus.
Similar to education, the Chinese want to learn and fit in with the Western crowd. American culture is the hip and cool trend most of the time. The younger generation loves American movies and lifestyle and if you can find an angle to enjoy this fashion and culture trend, you’ll be doing well.
But sure, you’re not an LV or Coach brand, but don’t get down. You can be an up and coming brand from overseas and start a fashion trend in China. Sometimes Chinese people THINK it is a hot trend in America when maybe it started right here in China.
If you enjoy blogging and content creation, there are tons of opportunities in fashion. Maybe let’s call it “cultural marketing” via Wechat and other Chinese social media platforms. Build up a network of local Chinese sales agents who will spread your message to their friends on social media and grow your brand’s empire!
Some That Will Be a Real Challenge
Now that we covered the ones that are good to import into China and sell, some of the tougher ones I have noticed for the past couple years:
It was a huge fad in the late 2000s, get wine to the growing Chinese middle class. But seems like everyone and their mother shipped containers of wine from around the globe over here! Now there is an over-supply and competitors are crushing each other harder than they crush their grapes! I’d be cautious to start a wine brand expansion in 2016!
Chinese Tech and Internet
While many of us are frustrated using the Chinese internet where Facebook and Twitter are blocked, we just need to learn to deal with it. But maybe you have an idea to make a Chinese Facebook that won’t be blocked. You think, hey, if I can make a cool social network that isn’t blocked in China, all the Chinese people will use it!
Sure, maybe. But even that is a challenge.
Yet you’ll not be able to do it, at least not in your own name. Non Chinese are not allowed to do a “true” internet company in China. That means things that involve social sharing and viral and user generated content. Sure you can make a website, but as far as having one that is community driven – there are big regulations.
I won’t get political here. Let’s just say after what Google did in China by unfiltering their Chinese search results, well ya, that didn’t make the case of foreigners doing Chinese tech so strong. Chinese government doesn’t trust a laowai (foreigner) to uphold the requirements of being a true Chinese internet company. So you’ll need to have the company and the license in the name of a local Chinese.
If you go that route, watch your back. Sure you may have been friends with this person for five years, but when the company starts scaling millions of users it will truly test the friendship. And you have no legal recourse.
I commend you for even considering to do tech in China as a foreigner, but you still need to be cautious.
Financial and Fintech
The finance industry is regulated anywhere in the world. Governments and banks are tight knit, as the currency is an essential part of a healthy government. So like the internet project above, I’d say it’s also quite a challenge to do a financial startup in China too as a non local.
There have been reports about the government no longer issuing fin-tech licenses to new Chinese startups. This is because they are thinking how to best regulate it. All governments are afraid of terrorism and money laundering, and also losing control of the inflow and outflow of money between their borders.
We do have a good podcast on China Business Cast talking about Fin tech in China, if you want to check that out.
Beauty Products / Cosmetics
The Beauty and Cosmetics market in China has been dominated by foreign brands for many years. Chinese women typically trust foreign brands more than local ones, believing that they’re more refined and of higher quality.
Makeup products such as color correcting (CC) and blemish balm (BB) cream are most popular among Chinese women, as it gives not only coverage for their skin but also skin-benefitting properties. When it comes to skincare, anti-aging and skin whitening products are both the most popular. Spending habits among women in China are shifting from being price-focused to quality and brand driven – and some local Chinese cosmetics just don’t make the cut due to continued counterfeit product scandals.
Chanel, Dior and Estee Lauder — these are just three of many foreign brands that Chinese women love. Chanel reigns supreme when it comes to beauty products in China, mainly because it is effectively courting Chinese consumers through social media, using well-known Chinese celebrities as well as Western celebrities known in China. However, there is this American brand that is making its way to global domination called Glossier — it’s all over social media and we’re pretty sure it’ll be a hit in China soon.
Electronics are still number 1 among import purchases in China. Computers, mobile phones, home appliances – these are just some electronics Chinese buy internationally. However, this product line is already renowned in China and entering the competitive market may be tough. Nevertheless, if you plan to step in, you might want to try selling something new instead. Perhaps high-tech toilet lids from Japan? Did you know it has become popular in China for its variety of auxiliary functions, such as heating and sanitizing? Cool, right? In addition to that – rice-cookers, watches or smart watches, mobile accessories, digital cameras, and car accessories can be a good idea, too.
Apple, Samsung, and Fujitsu are three of many foreign electronics brands that Chinese consumers like to buy. These brands have already established branches in the country, so these aren’t really the brands you would want to sell in China.
Many people today look to other means to invest, and one way Chinese invest their money is by acquiring gold jewellery. To Chinese, gold symbolizes and represents good luck, royalty and special occasions. China’s growing throng of affluent consumers is driving a rebound in demand for gold rings, bracelets, and necklaces as the property boom and high stock market valuations boost wealth in the largest bullion market. The nation’s demand for gold jewellery climbed 10% last year to almost 700 metric tons as the wealthy increased purchases in second- and third-tier cities, according to the China Gold Association. (source)
Travel and Leisure
Chinese love travelling, in fact, they spend over $300 billion on their travels every year. They basically travel for pleasure and are willing to splash some cash for an extravagant trip abroad. With this, selling them Travel Packages seems a good idea, especially if the destination will be your home country where you are most familiar with traveling.
The most visited countries for Chinese tourists include France, the United States, and Spain.
To start off, I hardly know anyone who hates chocolate, so I was surprised that Chinese people has taken decades to recognize and accept chocolate. Chinese have always preferred salty snacks, but younger generations have started to love the taste of chocolate so much that it’s finally making a hit in China. So far, a lot of foreign chocolate brands have entered the Chinese market and 32.1% of consumers actually prefer these brands. Still, it’s a good market to get into while China grows its taste for chocolate.
Dove, M&M, Snickers, Lindt, Ferrero and Nestle are just few of many chocolate brands that are emerging in China.
Ready To Start Importing to China?
So, hope today’s guide helped you out. I’d recommend that you do it step by step first. As the lean startup methodology goes, test your assumptions. Take some time in China and explore what people are doing. Take some samples or a prototype. Do a focus group.
If you’re doing physical products imported into China, check our other guide 3 ways to import to China.
If you’re doing service based business, you can start with a few pilot clients at a low fee and see how the process goes.
Take It One Step At a Time!
Overwhelmed? Believe me, I know!
China is a different world and we are always over-stimulated on what to do first. Best help I can offer, for China business startup or any new venture, focus and take it step by step.
Find a business you enjoy to do. Something that you don’t mind to work on every day, read about, answer questions about. If you’re interested in children’s education, and want to make the world have equal abilities for a child to learn no matter where they’re born, then China will welcome you!
Want to share with us your questions, comments, or examples? I’ll be watching the comments and keep you answered as things happen.