Exporting to China: A Practical Guide for British Brands
Photo by Miguel á Padriñán at Pexels.
Demand aside, there are some serious hoops to jump through for British brands looking to enter China’s e-commerce market. Serious hoop jumping can equate to serious returns though – here’s what to consider when exporting to China…
Entering China’s e-commerce market is an attractive proposition for British retailers right now. Tricky times for the retail market domestically means looking abroad for growth potential makes sense. And nowhere is there more opportunity than China.
Even pre-pandemic, cross-border e-commerce in China – consumers buying products internationally – reached almost £46 billion. That figure is expected to grow in 2021 and beyond, according to consulting firm Westwin.
Billions of pounds of spending, plus China’s love of all things British, means getting your brand into Chinese consumers online shopping carts could mean significant business growth.
Read more: How UK Retailers Can Capitalise on China’s Demand For ‘Brand Britain’
Making sales is only one part of the equation though – actually getting your products to your new customers in China is part two.
Exporting From the UK to China
Just a note: The following is a guide only – we highly recommend consulting professionals like the China-British Business Council before starting your Chinese expansion plan.
Before you book a courier, make sure you can answer ‘yes’ to the following:
1. Have you registered your intellectual property for the China market?
This might include filing patents, registering trademarks or obtaining copyright protection. There’s no way of tiptoeing around it: IPR protection should be a priority for any business with a presence online or in China.
“If you only do one thing, register your trademark in China.” Dan Harris, a prominent expert in Chinese law.
In China, as well as a long history of trademark and other IP infringements, there will always be a market for counterfeit products (blame Shanzhai culture). A registered trademark means that you have the legal rights to fight counterfeiting and protect your business interests.
2. Can your product be legally exported to China?
Good news! China issued new Cross Border eCommerce Regulations in 2019 that permits overseas sellers to sell consumer goods directly to Chinese consumers through certain registered e-commerce platforms (think: Tmall and JD.com). Goods that fall under this category can generally be imported into China on an expedited basis at reduced import tax rates.
While some brands choose to ship directly from the UK, others ship larger quantities that are stored in bonded warehouses in China and then shipped locally upon purchase. Another option to consider is shipping bulk quantities to Hong Kong that then fulfil orders as and when to China.
Resource: Cross-border e-commerce (CBEC) regulations for Chinese consumers
There are some restrictions on what type of products can be imported into China. As well as the usual suspects like banknotes and explosives, the following catch-all type clause is worth considering as it has tripped up well-meaning exporters in the past:
“…printed matter, magnetic media, films, or photographs which are deemed to be detrimental to the political, economic, cultural and moral interests of China.”
Resource: UK Department for International Trade: Exporting to China
3. Have you got the correct labelling?
All imported products need to comply with national standards. Most experts would also recommend Chinese language labelling prior to shipping. Any incorrect labelling can result in penalties and confiscation.
Information must be printed directly onto the packaging for some products. Your labelling should always indicate:
- which Chinese standards have been used where this is applicable,
- the country of origin of the product,
- the name and address of the Chinese distributor.
4. Have you considered tax and customs clearance?
UK businesses aren’t double-taxed on goods exported to China thanks to a deal signed by both country’s governments. If you are registered for VAT you can zero-rate the VAT on most goods you export to China. You will need to get evidence of the export within three months from the time of sale.
Resource: UK Department for International Trade: VAT guidance
Resource: UK Department for International Trade: Exporting to China
5. Have you partnered with a reputable local partner?
This is the most important part of your journey. As well a safe and trusted digital payments platform like PyxPro and a China-centric marketing agency like PyxHub, an in-country commerce partner is essential. We recommend contacting the China-Britain Business Council for information on reputable partners.
Exporting your brand to China isn’t easy, but with the right guidance and the right partnerships, it can be a successful and highly lucrative move.