How to export to... China
There are many reasons to export to other countries - an expanding business, demand for your product, gaining recognition for your brand globally. However, no two countries are the same - where do you get started exporting or trading with a country that's very different to your own? Virgin StartUp-funded entrepreneur Ricky Kothari is the co-founder of T-Sticks, a luxury tea product that has started trading abroad; here are his tips on how you can get started exporting to China.
Exporting to China is a business venture worth doing - and worth doing well. Increased foreign investment make business relationships with China potentially profitable, but knowing the bureaucratic culture and business etiquette could mean the difference between success and failure.
What kind of businesses do well exporting to China?
David Cameron’s trade mission to China back in 2013 emphasised the possibility for British SMEs to capitalise on the export potential within China. A sector that can do particularly well is the food industry. We discovered that China can often be more trusting of Western brands, thanks to the tighter regulations and food standards we have here. However, that is not to say that other businesses will have a hard time exporting their goods. Tea is a traditional Chinese product, but our innovative approach meant that we successfully exported it to China!
How to get started & what to expect
Getting started can be a daunting experience and it may be worth beginning initially with a trade fair in China to gauge the reaction to your product. This will also allow you to meet retailers and end consumers, as well as revealing the distribution channels you may wish to take and which cities to start working with.
China can be a bureaucratic nightmare. Expect to produce lots of documents, depending on your industry, such as ingredients, health certificates and packaging lists. Do not underestimate how long it may take you to get certification. Build this into your project plan whilst maintaining communication with your agents and customers within the country of import, so they can estimate timelines when products are cleared and available. Make sure you abide by the requirements of the documentation and it will help work through the red tape. The worst case scenario is that your goods are rejected and the cost of destruction or return could hurt any business - startup or not.
Concerning the actual exportation of goods, we exported our tea sticks in pallets. We discovered that it was worth using a plastic pallet, as wooden bases require fumigation at source against any insects or pests. You will then need to provide a fumigation certificate. We reverted to plastic pallets to avoid extra costs! It's the small things like this that can catch you out.
It can be a challenge going it alone - a little local know-how really helps. However there is help out there. For example, we sought advice from UKTI.
Tips for doing business in China:
- The first business interaction you will have in China is a meet-and-greet. This begins much like in the West, with a handshake. Add to this a slight nod of the head and you’ll soon blend in. Do be careful of having too firm a grip however, as this could be interpreted as aggressive.
- In the same vein, avoid superfluous physical contact and be conscious of your body language, which should remain formal and controlled at all times.
- Make sure you have a translator if you're relatively new to the language. Our International Business Director set up an Asia office in Shanghai and learned Mandarin, enough to get by, but continued to hire a translator for the trade exhibition booth and for meetings with buyers - this ensures there are no misunderstandings.
- During our first business meeting in China, the T-Sticks team were struck by the importance of business cards and how to handle them. Using a card case is considered the norm. You should also always give and receive your card with two hands, taking a moment a read the card before placing it into a case. It is also advised to make sure the writing is facing the recipient.
- Do not forget how vast China is as a country. Gao Zhikai, a former interpreter for Deng Xiaoping, once said that “Within the four corners of its country, China is a world in itself.” This makes it difficult to target a ‘single’ market, so do not skip researching where your target market is likely to live and work.
Doing business with China is complicated, but rewarding. Understanding and being sensitive of cultural differences can get you a long way, as well as really knowing your market and where to target. Just make sure you keep ahead of the documentation and have a solid plan to go by. And don’t forget to say 很荣幸与你们做生意 (Hěn róngxìng yǔ nǐmen zuò shēngyì: it was a pleasure doing business with you.)