5 solutions to export agro products in China.

Agroalimentaire

The agro market of import products in China is growing quickly.

The Chinese balance of trade of agro products is in deficit and is worsening, that leads to an increasing of imports. To export food products in China today seems to be a winning solution.

What solutions are offered to an exporter willing to sell his products on the Chinese market?

1. Participating in fairs and sell from France

Taking-part-in-food-fairs
The first solution offered to an exporter willing to sell his food products on the Chinese market is to participate in fairs, in order to meet potential importers and distributors and to sell his products from France.

Many fairs are organized in France and in China, such as Top Wine, Prowine, FHC, Bakery Shanghai. During these fairs Chinese importers chose the new food products that they will import. These are a good opportunity to meet these importers, to present products, to understand better the needs of Chinese consumers and also to sign contracts.

This solution allows a French importer to keep his flexibility, as he will sign a contract with a Chinese importer who will sell the products on the Chinese market.

The French exporter will sell his products from France, and will not have to worry about finals consumers, or about the procedures needed to sell on the Chinese market, as the importer will take in charge these concerns.

However, with this solution, the French exporter loses the control on his products and on the transportation, storage and preservation, which can be risky with some food products. He also will not have any control on the brand image in China.

2. To have a salesman under an umbrella company

Umbrella-China
When a French company goes through the services of an umbrella company, it allows company to have a salesman who prospects on the Chinese market. The umbrella company will take care of administrative and human resources procedures needed to launch a business on the Chinese market. The foreign company is linked to the umbrella company with a service provision contract, while the umbrella company is linked to the sales representative, who is working for the foreign company on the Chinese market, with a labor contract.

This cheaper solution allows keeping flexibility, to have a team who prospects on the Chinese market and manages the logistics of the products It also a time saver since the umbrella company takes in charge all administrative procedures. The salesmen can therefore focus on their core business, develop their network in China and find new clients.

3. Creating a joint-venture

A joint venture is a joint branch of two or several companies, as part of an international cooperation. An European company will go into partnership with a Chinese company in order to sell products on the Chinese market. With this solution, it is necessary to find a partner company and take care of heavy administrative procedures related to the creation of a joint venture.

4. Launching a WFOE (Wholly foreign owned company)

WFOE
In China, a WFOE is a company for foreign investors, a WFOE is entirely owned by the foreign investors. The creation of a WFOE allows staying independent. In order to create a WFOE there is no need of Chinese investors. The foreign investors keep the control over their investments, the management of the company and the commercial actions. A big amount of capital is needed when an investor starts the creation of a WFOE, and there are also months of administrative procedures. Indeed, the creation of a structure on the Chinese territory is not easy and the obtaining of necessary licenses can last several months.

5. To have Chinese partner

Chinese-partner
This last solution, in order to launch a business on the Chinese agro market, allows benefiting from the network and the knowledge of the market from the Chinese partner.

To have a Chinese partner makes the launch easier. However, it is important to make the right choice when you choose a Chinese partner. Many disagreements, due to cultural differences, can occur between the two partners.

Further readings