By Femke van Rijt
When entering the Chinese market, some foreign companies attempt to use the same business and marketing tactics that have worked for them elsewhere. Many underestimate the need for market research, which helps localize marketing tactics, prior to entry.
Investors who fail to understand the nuances of the Chinese market will struggle to survive. In this article, we will explore the different ways in which some multinational companies have failed or succeeded in acclimating to the Chinese market.
Alibaba to launch Tmall World, entering Southeast Asian markets
China’s e-commerce giant Alibaba will launch a new brand, Tmall World, which will provide a platform for China-based exporters to direct their products to markets in Hong Kong, Taiwan, Singapore, and Malaysia, among others.
Export-based manufacturers have been calling for new channels through which to sell their products, as traditional trade has slowed.
Chinese products that meet certain standards and certification will be able to use the platform to gain access to overseas markets.
Alibaba already has its Tmall Global brand, which allows foreign merchants to sell directly to the Chinese market, while domestic exporters do not have the same means to export to other Asian markets. They do this through either Aliexpress, or Lazada, both owned by Alibaba.
Our weekly round up of other news affecting foreign investors throughout Asia:
Import and Export Procedures in Malaysia – Best Practices
Malaysia continues to liberalize its import and export regulations; but, complex goods-specific rules still exist. In this article, we explain best practices for importing into and exporting out of Malaysia.
India’s ‘Beef Ban’: Repercussions for Meat, Leather, and Dairy Industries
The Indian federal government’s new ‘beef ban’ is producing anxiety in three large industries: meat, leather, and dairy. In this article, we explain the new Livestock Market Rules, 2017 and its repercussions for the industries that rely on buffalo.
By Alexander Chipman Koty
China’s sweeping new Cybersecurity Law (“the Law”) came into effect on June 1 amid widespread anxiety from the foreign business community. Many in the private sector were concerned by the Law’s stringent requirements, ambiguous language, and unclear implementation plan.
To allay these concerns, the Cyberspace Administration of China (CAC) modified the language of certain parts of the Law, and delayed implementation of cross-border data localization provisions until the end of 2018. While the last minute changes add a degree of clarity to the Law, and give additional time for companies to organize compliance, many of the fundamental issues that concerned foreign companies remained unchanged.
As a result, companies with operations or customers in mainland China should review the Law. Professional advisors can help determine whether your business needs to make changes to its business structure to comply with the new Law.
By Zolzaya Erdenebileg
While 2017 promises to be a better year than 2016 for the luxury market in China, the fierce competition for sales has not let up.
To increase outreach to their customers, many brands are investing heavily into e-commerce channels. About 92 percent of top luxury brands in China now have an account on the messaging app WeChat, compared to only about half that in 2014. This puts WeChat on par with Weibo, a popular Chinese microblogging site, on which about 94 percent of luxury brands have an account.
WeChat and the WeChat Store allow brands to stage creative and engaging marketing campaigns to reach customers in China. Setting up shops and multimedia marketing on the app has become simpler, as Tencent – WeChat’s developer – courts luxury brands in its competition with Chinese e-commerce giant Alibaba. For the most part, the move has been successful with more luxury brands experimenting with the app.
China has a multi-layered food regulatory system to ensure the quality and safety of imported food items. Every year, however, a large amount of food imported into the country is either returned or destroyed due to lack of compliance or irregularity in food quality.
This causes a significant loss to both the importing and exporting companies. In times of greater transgression, the import license may be revoked and the companies may be barred from future trade.
Keeping in mind the high business risks involved, companies must stay abreast of the latest food regulations and ensure the conformity of the products to the necessary import procedures. In this article, Dezan Shira & Associates and the Silk Initiative will introduce some of the many certifications, regulations, and procedures required to export food products to China.
By Dezan Shira & Associates
Chinese President Xi Jinping has taken the remarkable step of offering free trade with China to members of the Shanghai Cooperation Organization (SCO).
Speaking at the SCO meetings in Astana, Kazakhstan on Friday June 9, Xi said, “We could begin signing agreement on trade facilitation with SCO. We speak in favor of opening cross-border routes in time set by the governments of the SCO member states”.
Liaoning to loosen restrictions on foreign investment
On June 6, Liaoning province’s Department of Commerce released measures to further open the market and use foreign capital, which will ease restrictions for foreign investors and reduce operating costs to create a fairer and more efficient investment environment.
These will be specifically aimed at investors in the service, manufacturing, and mining sectors, with supportive policies implemented to encourage investors to contribute to the state-owned manufacturing industry’s transition to mixed ownership.
China has been loosening restrictions on FDI in order to combat capital outflows in recent months. The measures also compliment the country’s wider initiative to reform the manufacturing industry under the name of ‘Made in China 2025’, which encourages innovation in the high tech sector.