Exporting to China 2021: Tips for Exporting Fast Moving Consumer Goods

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Joined: Tue Jul 06, 2021 6:54 am

In May 2021, China's total import value amounted to about 218 billion USD. That's a 50% increase compared to the previous year, and it's the fastest import growth that China has experienced for the last decade. The surge in imports is partly attributed to trading markets starting to open up from the ease of COVID-19 restrictions. Furthermore, China continues to cut import tariffs (dropped from 21.8% to 15.8% in the last 5 years) and this is opening up the trade market substantially.

In this blog, we will provide advice for navigating the trade market in China and how to succeed in exporting consumer goods into China.

What You Need to Know About Exporting to China

China remains an attractive prospect for many businesses around the world. However, it can be challenging to enter such a vast and complex market. Whether you are just starting or are already in the market, take the following into account to ensure that you make informed decisions moving forward.

China International Import Expo (CIIE) 2021

Attending the 2021 China International Import Expo (CIIE) is a great way of gathering important information about the Chinese trade market. It’s the fourth annual edition and will be held in Shanghai from 5–10 November 2021. After a successful launch in 2018, CIIE helped build a platform connecting foreign and local businesses that import products into the Chinese market. Apart from the main exhibitions, you can gain insight into China import export by participating in thematic events such as seminars on current cooperation initiatives in specific sectors and summits and conferences.

Visit the China International Import Expo’s official website for more information on how this event can help you navigate China’s trade market.

Doing Business in China: Finding the Right Product to Export
How do you ensure that your product is suitable for the Chinese consumer market? There are several considerations to include when evaluating your entry into the Chinese market, including market segmentation and import structure.

There are two primary customer groups you could address:

Upper market - values brands and their associated reputation and prestige.
Price sensitive mass market - As most foreign brands cannot compete on cost leadership with Chinese manufacturers, you should consider brand-strengthening strategies when introducing a new product to this market.
As the structure of Chinese imports continues to mature, the Chinese consumer will generally choose to purchase imported goods if they are significantly different from domestic products. According to Deloitte, the additional services and content become increasingly essential to ensure the success of an imported product. Traditionally, the focus was on the price, quality and function of the product, but the new criteria for purchase include seamless interactive experience, personalised service and value recognition.

Product Categories With the Highest Potential to Succeed in 2021

When deciding what to import, you may want to consider evaluating your product against the following criteria: willingness to consume, overall consumption, online penetration, and premiumisation. In terms of willingness to consume and overall consumption, your product is most likely to succeed if it falls into one of three broad categories: ‘beauty’, ‘health’ and ‘family’.

While looking for products online, the Chinese consumer primarily searches for keywords related to safety, quality, price and design. When it comes to online penetration, personal hygiene products, baby care, and skincare have the highest and still growing rates. Those products have also just recently entered the premium sector, with makeup, skincare and diapers having the most elevated and increasing penetration rates in the premium market.

Exporting Fast Consumer Goods (FMCG) into China

Total spending on fast-moving consumer goods is not likely to slow down, despite general concerns. With the newly-reduced import tariffs, incremental growth for at-home consumption of Fast Moving Consumer Goods (FMCG) will remain robust.

According to market research, not every product will withstand the growing demand for local names, with some being over-saturated by both local and overseas brands. To succeed in this market, you need to ask yourself whether your product is the right fit for the Chinese consumer.

3 Key Factors You Should Keep in Mind When Exporting FMCG to China

china import export

With the new tax tariffs cuts, one thing is certain – we will see robust growth in imported consumer goods, and the market will become more competitive. The new policies encourage small to medium businesses to enter the market, as domestic and foreign brands will continue to grow in that sector.

Whether you are looking into starting a business, or you are already trading goods in the Chinese market, here are some tips to consider to stay competitive:

Leverage your consumer data to build a brand based on differentiated service and content.
Take advantage of the market dynamics and build customer-centric digital platforms for products with high and growing online penetration in China.
Pay attention to consumer preference for premiumisation and introduce high-value personalised products.

The Future of China Import Export

While the China import export market growth projections are promising, it is crucial to be aware of internal factors that shape the market. After a decade of indulging in foreign-branded products, the Chinese consumer is now rediscovering their love for domestic flavours. With that in mind, there is still a high success potential for new foreign brands entering the market. Further research on Chinese consumer preferences shows that premium niche sectors will continue to attract foreign market entries. Overall, China will continue to be an exciting and profitable market for export brands.

If you would like more information on importing or exporting goods into China, feel free to reach out and book a FREE consultation with our experts.

Topics: Doing Business in China, Trading in China
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