Boom of Food Imports in China
China’s economy is growing, with the country being the second largest economy and the world’s top importer and exporter. The economy is very diverse and is dominated by different food sectors. However, the agricultural products in China are in deficit and are worsening, which leads to the boom of food imports in China. At the same time, China is also in deficit in milk and dairy products, and the Chinese consume more and more dairy products every day. The food market of import products in China is growing quickly and having a sales representative under an umbrella company looks to be an effective way to approach the Chinese food market.
With a lot of issues and scandals under the local food market in China, more and more local Chinese enjoy imported Western products to preserve the health of their families as food safety is becoming more and more important. It is estimated that China will be the biggest importer in the food sector by 2015-2020.
Exporting products on the Chinese market
There are a lot of solutions to consider in exporting your food products in China, with Chinese Laws and language very different from other countries. Some of them are:
Participating in Fairs and while Selling from the Origin Country
Participating in fairs in China offers the Chinese importers and distributors to see your product, be curious about it, to have a basis on where to start, and possibly, to sign contracts. During these fairs, the importer and distributors choose new products to market in China. There are quite a lot of food fairs regularly going through Shanghai, one of them is Bakery Shanghai.
This solution helps the exporter sell the products from his/her origin country without having the problem of the exporting laws and regulation from the Chinese government. But, the drawback of this solution is the exporter loses the brand control of his products, making it the importer or distributor’s goods. He will have no control whatsoever in the products after being exported in China.
Creating a Joint-Venture
A joint venture is when two companies join together to form an international corporation. The foreign company will go and partner with a Chinese company so that the Chinese company would be the one in full charge with everything that goes in China. With this, it is necessary to find a local Chinese company who will partner with your company and you’ll have to take care of the administrative duties in the joining of the two companies together.
Launching a WFOE or wholly foreign owned company
Launching your company doesn’t need a Chinese local, but should have a very big capital as this can be very expensive and time consuming especially with the administrative procedures and in terms of obtaining certain licenses to construct the company.
To have a Chinese partner
This can be an option instead of a whole company as a partner. It has basically the same procedures with creating a joint-venture in a Chinese company, but this is very risky as you have to make sure the person you choose is trustworthy and can do the job well. Many disagreements and cultural differences can occur with this option.
To have a Salesperson under an Umbrella Company in China
Hiring and positioning a salesperson to prospect on the Chinese market can be attainable by going through the services of an umbrella company. The umbrella company will take care of all the basic things needed to launch a business on the Chinese market, like the administrative, salary, and human resources procedures.
The foreign company will be linked to the umbrella company under a service provision contract while the umbrella company is linked to the sales representative with a working contract. The sales representative will work for the foreign company on the Chinese market, basically, in China.
The umbrella company will be in charge of the administrative, visa, and different other procedures in hiring of the foreign company’s sales representative, while the sales representative does his/her core job. In approaching the Chinese market, he/she will do everything that is needed to know and understand the rules and laws and health regulations in China in order to import his products. Being in China gives him a greater chance to more about the competition, the evolution of the market, and to find more clients.
INS Global Consulting
INS Global Consulting is an umbrella company with PEO services offered that can serve as the best alternative in investing in the Chinese food industry.
If you want to know more about the different PEO services offered by INS Global Consulting and how it can make importing in the Chinese food industry easier for your company, go to our website or contact INS Global Consulting.