How Do Chinese Online Shoppers Buy From Overseas?
Chinese shoppers have been engaged in cross-border import trade over recent years.
Buying overseas products is generally referred to as “HaiTao” in Chinese.
“Hai” (Sea) means overseas, “Tao” (Search) means find and purchase.
Official Brand Web Store
It is the most reliable way for Chinese consumers to buy if they know your brand.
In the beginning, most foreign e-Commerce sites don’t offer the direct shipping service to China. Chinese consumers bought through overseas e-commerce sites, and ship the purchased products back to China through intermediary shipping companies.
Language barriers, different payment, customer service and after-sales service are also obstacles for average Chinese consumers.
Customer service is critical for international buyers, I am sharing my story about Emily’s New 3Doodler Start Pen .
China Government Policy Evolution
The HaiTao market was not regulated in the early stage and had been operated in the gray area for several years.
Chinese government has launched several new regulations to bring order to this chaotic market.
New rules always bring different results for different players, and they are not always good news.
But we can believe all the policies are designed to support the market in the long term.
It is quite difficult to categorize the import eCommerce models in China since I did not learn how to be a good librarian.
Some of the following 12 models might be overlapping due to the different rules.
Another reason might be that the market is way too dynamic and some companies have also changed their strategies.
Let me know how to improve this.
1. Big Cross-border B2C Platform
For companies without local legal entity in China, the most common solutions to reach Chinese consumers directly is through self-developed e-commerce website or getting listed on Tmall Global.
As a China cross border consultant, I was invited by Paypal to shoot this video sharing my career life and experience of receiving overseas payments.
I started using Paypal in 2004 when I was building on my own web store then. It is quite early for Chinese merchants and it brought me initial foreign client.
What is a WFOE?
A WFOE in China is a 100% wholly foreign-owned enterprise doing business in China. The foreign company has sole responsibility for its profits and Losses. It is required to register as a legal person who is restricted to certain businesses. The enterprise is able to implement strategies that effectively conform to the interests of the parent company aboard. Moreover, technology and know-how are given better protection.
Features of a WFOE in China
- The term varies according to the nature of the enterprise, any extension is subject to the approval of the relevant government authority
- Independently carry out parent Company’s global strategy
- There is a minimum capital contribution required, known as registered capital, which varies according to the business
- A WFOE can receive revenue in RMB, and issue RMB official invoices (Fapiaos) to customers
- A WFOE can transfer net income in RMB to US dollars for remittance to oversea parent Company
- A WFOE can Hire Chinese labor directly adhere to all Chinese laws
- The establishment of high-tech WFOEs is encouraged, And a WFOE can get intellectual property & technology know-how guarantee
- A WFOE is allowed to acquire land use rights in the form of land use right certificates
All foreign business owners need to face the complete different culture in China and the way to do business.
In the last 5 years, we’d helped many overseas businesses enter into the China market.
Here are some tips to start your business in China
1. Strategy First
2. Pick Your Location
3. Determine The Legal Structure
4. Find A Chinese Partner, or more
5. Work With Advisors
6. Develop A Business Plan
7. Choose A Perfect Name
8. Register Your Business In China
9. Open Your Bank Account
10. Hire Your First Employee In China
11. Build Chinese Website That Can Sell
12. Get Your Products To the Market