Why Bring Your Brand To China?
Many brands have chosen to bring their products to China: Why? There are several really good reasons for this, and also some very real concerns to consider before making this leap for your brand. For this reason, before I get into anything else, DO NOT TELL ANYONE that you are considering doing this until we have spoken, and you know what to say, and what to NOT say. After all, your brand is your baby. You gave birth to it. You nurtured and protected it. Now you're thinking about bringing your brand globally, but just aren't sure how, why, or even if you should do it. Especially when considering the China market. Some of the main reasons for considering bringing your brand to China include the size of the China market, the appetite for American products in China, and the control you have over your brand in the online marketplace.
How Big is the China Retail Market
According to Chinese statistics, retail sales in China hit just over 6 trillion USD, and Morgan Stanley says the China consumer market is set to double by 2030. The CIA stats show China imports about 2.3 trillion dollars, and the US accounts for 7% of that number. That's 1.6 billion coming from the US. Let's say you have a great product and your brand resonates with the Chinese consumer, so you want 0.25% of that. Well, that's only $40 million, so you've got to really stand out to capture those dollars.
Do Chinese Consumers Really Want American Brands?
The short answer to this question is a resounding, "Yes!" Chinese consumers view American made products as having superior quality and value when compared with domestic products. There are several reasons for this, but what I have found through personal experience is the manufacturing processes themselves. If you've ever done a site visit to a Chinese manufacturer, you'll find two extremes: An state-of-the-art facility with amazing technology and processes in place, and a factory with dirty floors and folding tables with workers packed into them working elbow to elbow with sweat pouring off their brows. There are many levels of quality between, but most that I've seen fall into these extremes.
The Chinese consumers with disposable income are the workers in these factories. They are sucking up Starbucks and rushing around whenever they are not working, caught in the consumption trap of the city. They are enjoying the freedom that they worked hard to earn. They also know what goes into the work they do, and would rather have a US import versus a Chinese made product. There is a caveat to this: You have to provide a value price for the superior quality. This doesn't mean you have to compete on price with the Chinese manufacturers. It does mean that you have to have a discernable difference in quality and value.
What Considerations Need To Be Made?
Based on the work that I've done in China, there are several key considerations to make before bringing your brand to market there. The first is brand protection. Counterfeiting is a HUGE market in China, and they take pride in their ability to create great knock-off products. They do not understand why you don't want them to do it. It is not in their DNA!!! So, what do you do? Well, I have developed a process that includes several important steps to protecting your brand BEFORE you bring it to China, so again I say, DO NOT TELL ANYONE if you are thinking about bringing your brand to China until you talk to me and we have a plan to do so while doing everything we can think of to protect your brand.
Now, you've probably already spoken to some people, and they gave you a pitch about QR codes and distributors and licensing and all that great stuff. Cool. Take that pitch and toss it. Cookie cutter approaches do not work. Let's talk about how we can approach this in a way that leverages my network of trusted associates and friends in China to determine our best plan to bring your brand to the China market.
Although counterfeit and trademarks are the reason to NOT discuss this with anyone else, we need to understand the logistics, because this is where your biggest surprise expense could be hiding. We'll look at HS codes for your product, shipping terms we should consider. 3rd Party Freight services and which import companies, warehousing companies and 3PL fulfillment companies to trust and select.
I've provided a lot of information to think about, so, for now, marinate on that. If you want to reach out, please feel free to do so using my Contact Form.