Should be used in the service of an agent, or find yourself a local distributor ? Be implanted directly on the territory, or go through the e-commerce ? The point on issues of paramount importance, when considering tackling the huge chinese market.

Only 7% growth in 2015, table Beijing. It is true, the growth in china marks the not… but it does not remain about it less appetizing for all French SMES in search of international. Which tactic to adopt to invest in this territory, distant, sometimes frightening by its dimension and its specificities ? The solution of common sense is dictated by the human and financial resources of the company. And, beyond that, by understanding what each route of access to the market implies.

1. Use a commercial agent

Sort of a technical sales representative for your business, the agent adds value to your offer to its network of clients and will help you in customs formalities and import. Take an agent always proves to be risky. “It may take time to find the right, confirms Chunyan Li, author of “Succeed on the chinese market”, editions Eyrolles. It must be in the same time a person of confidence, particularly on issues of intellectual property, and at the same time a competent professional”. And even after you have found the rare pearl, the things can turn to vinegar. “My agent was very good in the beginning, tells the story of mr. X*, boss of a SME with 150 employees that manufactures agricultural machinery. And then, he began to take lots of cards, to disperse. We feel in our backlog that we are no longer his priority. I ask myself the question of continue to use their services, but I hesitate because, solicit only the final customer, this is not easy when one does not know a person.” All the more you need to know to “speak” to the chinese customer. “In France, with our culture of engineering, we usually about the technical aspects of our product for hours, so that the Chinese, all they care about is the price, and the function of the machine : what is it. Result, in order to sell there, we had to develop specific products, less expensive, and stripped of their technical skills”. To Business France, China, we do not recommend that French companies wishing to sell their solution in the Middle kingdom the solution of the agent… except if we sell industrial goods, with the need to properly qualify the customer’s need. The agent, which plays the role of matchmaker in some way, must be distinguished from the importer, who, book, and invoice the customer. “The problem with the importer is that the customer isn’t always a good photograph of the market because, even if he gives a recommendation on the sale price, it does not know in the end the final price,” notes Frédéric Szabo, deputy director of BF China.

2. Find a distributor

It was during a trade show (Kind und Jugend in Cologne, which specializes on the universe of the child) that Francis Favet-Lesage, the leader of Iltet, a company that sells baby bottles and teats innovative, met Larry Kung, CEO of Leyou, 1st chain of stores-baby and 1 e-commerce site in the industry. The partnership agreement was signed in march 2013, and as of August, the distribution began. “There are virtually no intermediaries between the brands and Leyou, indicates the French. They realize it themselves, the sourcing, importation, logistics, product promotion, they have their own training centre of the vendors…” A structure that is very “square”, so, that works “the american way”… but that has its reverse. “The suppliers are rated,” explains François Favet-Lesage. The slightest problem in the supply chain, and you are wrong. Personally, when I received an email from Larry Kung, I tried to reply to you within two hours, in order not to lose points.” Iltet has signed a contract of exclusive distribution with Leyou. “China is large, it is a country-continent, so this is not necessarily problematic to grant exclusivity to a partner, but be careful to give a scope to this exclusivity, as a product line or a geographical area,” advises Frederic Szabo.

3. Implement a point-of-sale on site

A Qingdao, in the Shandong province, yet another “mall” has just appeared and Alain Bellouard, leader of the jewelry Baïn Creation, can be pleased to have been able to open his corner-level commercial space topped by a 50-storey office. “This centre is managed by a corporation franco-chinese, the draft of which has been validated by our in-house association (the Boci) and by CCI international, says the entrepreneur. This has allowed us to ensure that our questioner was serious, before we engage them.” For the ark of four meters long, Baïn Creation benefits from a seller’s multi-brand. The early sales are promising, Alain Bellouard intends to continue its adventure in china, by developing a shop of their own in Shanghai, alongside a friend who resides there for ten years. Today, the structures 100% owned by foreign capital are allowed. But the solution of setting up in direct is to be preferred only when the chinese market is strategic for his company, because of the strong financial and human resources that it mobilizes. “It may also be worth when it has products of high technology, to better track potential problems of counterfeit goods,” says Chunyan Li. The other way to gain a foothold on the territory : taking over a company. “Doant the acquisition of a company or a chinese brand, or taking the units to his capital, the French company acquires experience and intelligence on the market and can earn two to three years,” tip Frederic Szabo

jewelry Baïn, sold in 120 stores in France, are now clients in Qingdao, and soon in Shanghai.

Baïn Creation

4. Play the card of e-commerce

Since a few days, the foreign operators have the right to go up in China platform for sale online. Either. This solution cannot, however, reasonably be considered by an SME. “Do a copy-paste of its French website, with a simple translation, it is doomed to failure,” says the deputy director of Business France China. We do not talk the same way to a consumer, French or chinese. And even though this platform would be designed the right way by a Chinese, would pose a serious problem of communication and visibility.

Another solution, e-commerce and cross-border (from a site which is not hosted in China), for which today there are facilities of trade – exemption of customs duties usual in particular to products (e.g. cosmetics) that are sent to individuals, in the form of small colisages. “The cross-border sales have the benefit at this stage of such facilities as the government wants to encourage domestic consumption, but it’s hard to know how long they are going to last and in what proportions,” says, however, Frederick Szabo. I have to reference it on a chinese platform, and the export of “classically” its products (JD.com for instance, has launched last February a “space France”). “A sale over the internet, this is an export as another, with respect to standard chinese, with customs duties”, would like to remind the deputy director of Business France China. With a constraint additional, compared to other countries : the products should be stored in China, because the chinese consumer requires delivery time of a few days, and not a few weeks.

What is the preferred way to address the chinese market, it will be necessary in any case to well protect the name of his company and that of its brand with the Inpi. “The Chinese have erected as a national sport the fact to recover the names on cards, to file the corresponding domain name, to force you to buy it back later,” says an expert. Where the precautions to be taken before even the first actions of prospecting.

* He wished to keep anonymity.

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* He wished to keep anonymity.