The fast-moving consumer goods (FMCG) market has never been so competitive...
Whether you’re the owner of a craft beer brand or you sell organic cosmetics, finding new markets where you can expand your business and increase brand awareness can set you apart from the competition and unlock new revenue streams for your long-term growth.
In Scotland alone, £4.8 billion worth of food and beverages is exported overseas every year, and that figure is only set to grow as businesses look for new opportunities post-Brexit.
With the Chinese government announcing import tariff cuts on consumer goods like food, water, drugs and cosmetics to increase the competitiveness of its domestic market, there has never been a better time to enter the country and gain access to more than 1.4 billion potential customers.
Below, we’ve rounded up five things you should do before entering China’s FMCG market.
Measure product demand
Before you enter into China’s FMCG market, you should measure product demand and see whether consumers would be interested in buying your products. In terms of food and drink, finding a unique selling point is essential, as it’s unlikely you’ll be able to compete on price. You may choose to market your product as ‘Made in Britain’, which will increase its appeal.
Look through sales records to see whether the current demand for your product is as high as past demand, and use projections to forecast the market. You could look at a competitor’s sales data, or even estimate demand based on your expansion into another country, but you should remember that China is a unique and complex market that requires its own analysis.
Be sure you can export
Although China has lifted restrictions and reduced tariffs on FMCGs, some products are subject to partial or total restrictions. For example, a company in the EU can export oranges to China, but cannot export cherries, and export pork to China, but not poultry. EU countries cannot export dairy to China, and some food colourings and food additives are banned.
Something else that you should take into consideration is testing and inspections. Cosmetics may need to be tested on animals before they can be sold to consumers, although China’s National Institute for Food and Drug Control said that it was “committed” to overhauling testing in the cosmetics industry and that it was exploring alternatives. If you run an ethical makeup brand, however, you may need to explore alternatives to protect your brand image.
You can find a full list of prohibited and restricted imports on the Chinese customs website.
Get to grips with regulations
Once you have determined a demand for your products and you’ve checked that they’re allowed to be imported into the country, the next step is getting to grips with regulations. If you want to sell your goods to Chinese consumers, those goods must comply with domestic legislation and receive the necessary certificates for quality, quantity and weight. Certain goods will also need to be inspected on arrival and may require additional certification.
The China Food and Drug Administration requires that infant formula, health foods and foods with medicinal purposes are registered and approved through government testing, whilst new regulations for online food trading are also in place. Understanding your responsibilities as a brand is important - if you make a mistake, you may be fined or have products rejected.
Register your trademark
There are lots of ways that you can prevent counterfeiting in China, but the most effective is by registering a trademark. The country’s legal system favours trademarks, so as soon as you have decided that you want to enter the market, you should make it official.
You may need to work with a marketing agency or translation company to give your brand a makeover to appeal to Chinese consumers, or you could enter the market with your existing branding. There are pros and cons to both - for example, maintaining your brand will allow you to save money and increase global brand awareness, whereas updating your brand to appeal to Chinese consumers will make it easier to promote and sell - so weigh up your options and conduct market research and testing before you make a decision.
Put together your business plan
Finally, you should put together a business plan, where you outline your goals and set some objectives for your entry into the country. You should cost everything from exporting to marketing and from taxes to distribution, and use data to project your income and cash flow.
With the right budget and strategy, you’ll be able to enter into the country and sell your fast moving consumer goods to the masses, but if you go in haphazardly, then you’ll struggle to succeed. Remember to follow the Chinese market and consumer demand, and focus on networking and relationship building. You won’t become a household name overnight - patience, persistence and hard work is key to success within the country, so be prepared.
If you want to export your fast moving consumer goods to sell to consumers in China, then you should think about digital marketing, and come up with a plan to promote your products to the masses. Our experienced marketing consultants can help with your expansion, using a unique combination of in-house resources and Chinese partnerships to develop the right strategy to increase revenue and grow your brand awareness in China. Get in touch today.
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