At your recent export meeting, you were discussing the possibilities of entering new markets due to increased competition on local markets. At your recent trade fairs visitors from China has shown an interest in your products. You are talking about marketplaces and logistic issues to cross border trade in China.
Market Access – How to?
The largest e-commerce platforms are run by Alibaba. They operate a platform for international cross-border trade called Tmall Global. It is a platform where you can team up with a partner having a web shop on Tmall Global or you can build and manage your own store. That solution is time and cost consuming for small and medium sized businesses.
Basically, there are two options to deliver a product to a Chinese consumer.
- Single shipment from Denmark
- Bonded Warehouse in a Free Trade Zone in China
By single shipment the product is send directly to the Chinese consumer from Denmark. A Chinese consumer buys a product on a web shop on the Tmall Global platform. The web shop is operated by a third party from outside China. A shipment directly from Denmark has a delivery time of app. 7-10 days. The logistic provider PostNord and China Post has developed a product called EMS (Express Mail Service). The price of sending a product to China is app. 50 DKK per item and 30 DKK per kilo. EMS is able to reach 70 % of the population in China within 10 days and you can track and trace the package. EMS is a courier service, where the package is handled in a separate route and flown in passenger flights.
Other logistic providers such as DHL and FedEx is also a possibility.
Single shipment is an advantage for small and medium sized businesses to test their products on the Chinese market without being there themselves. Engage with an umbrella store such at Ehubnordic’s web shop and your products are ready to be sold in China.
Trade Free Zones – Bonded Warehouse
Shipping your products to a bonded warehouse in a trade free zone means that you send them on pallets or by container to China by ship, plane and train. When they arrive they are stored and send to a Chinese consumer when an order have been completed on a web shop on Tmall Global.
One of the advantages is that your delivery to the customer is faster, because the products are already in China. Finally, it may also lower your distribution costs.
This solution involves cost for storage in China, transportation, unpacking, picking & packing as well as shipment to the customer. Therefore, the demand of your products in China is important to be able to estimate. Therefore an initial start with single shipment from your home country can be recommended.
There are 15 trade free zones in China where they have bonded warehouses e.g. Hong Kong, Beijing, Shanghai, Ningbo etc.
Great potential for Nordic Brands
With the growing middle class in China and their increasing purchasing power the interest for international products has risen. The Chinese consumer is willing to pay a higher price for originality, authenticity, trust and safety and that is a great potential for Nordic brands. Furthermore, the Chinese market is the largest ecommerce market in the world with a middle class as the size of the US population, counting today, which will only grow over the coming years.