China marketing service
Hotline: 86-755-82147392, Email:info@citilinkia.com
When setting up an actual operation in China there are a few company setup options including the popular wholly owned foreign enterprise (WOFE). Each company structure has its own benefits as well as risks. We strongly recommend seeking legal advice on this matter. WOFEs are entirely funded with foreign investment and as such bear all of the risks but also reaps the profits (subject to China taxes).
Relationships
Personal relationships are crucial when doing business in China. As such, it is imperative to be patient and take time to forge a strong personal relationship with your Chinese counterpart.
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Localization
Though Chinese consumers welcome foreign products, they prefer goods accommodated to their taste and customs. In addition, keep in mind when marketing to China, the ability to provide customer support in their language is an important value added selling point. You must create content pages in Chinese and potentially rework your designs and layout slightly. An awareness of cultural variations should be factored into your designs and marketing. Partnering with a local marketing agency is advisable.
Price
Most Chinese consumers are highly sensitive to price and are inclined to purchase products which are less expensive. However, in a Confucian society where social status is an investment, consumers are willing to pay a premium for items that will be seen by others.
Advertising
Advertising is an effective form of communication to create brand and product awareness in the minds of potential consumers. Channels for advertising include newspaper, television, radio, in-store and online. The Chinese advertising industry is heavily regulated and monitored by the government. Currently, television is the largest advertising segment with sales in ads estimated to be 85million RMB at the end of 2011. Online advertisement is the fastest growing segment with last year’s sales at 47billion RMB up from 4.1billion RMB in 2005. It is estimated that this year will be the first in China’s history where internet advertising will surpass newspaper advertising revenue. This will clearly change how foreign companies market to China.
Tariffs
Import tariff rates are divided into six categories: general rates, most-favored-nation rates, agreement rates, preferential rates, tariff rate quota rates and provisional rates. The Chinese government may apply tariff rates significantly lower than the published most-favored-nation rate in the case of goods that are necessary to the development of a key industry. This has occasionally been the case for imported items in the automotive industry for example.
Taxes
In addition to tariff duties, both foreign and domestic enterprises are required to pay value-added taxes (VAT) as well as business taxes. The VAT which incorporates the value of the tariff is assessed on the importation and sale of goods as well as processing, repairs and replacement services. Business taxes are evaluated on providers of services, the transfer of intangible assets and/or the sale of immovable properties within China.
Import Requirements
The Chinese importer (agent, distributor, joint-venture partner) will usually gather the documents necessary for importing goods and provide them to Chinese Customs agents. The necessary documents vary by product but may include a bill of lading, invoice, shipping list, customs declaration, insurance policy, sales contract as well as more specialized documents such as an import quota certificate, import license, inspection certificate and other safety documentation.
Payment
In international trade, when dealing with large quantities, the most common forms of payment are wire transfers or letters of credit.
Contact Us
For further queries, please do not hesitate to contact ATAHK at anytime, anywhere by simply calling China hotline at 86-755-82148419, 86-755-82143512, or emailing to info@citilinkia.com