International small and medium-sized brands entering China need to work through several steps:
- Choose an operating model: Build a China market team, establish a Chinese subsidiary, or work through a domestic distributor.
- Define the operating strategy: Set objectives for sales volume or value, market awareness and growth. Determine the product portfolio, marketing plan, resource allocation and key milestones.
- Select a trade route: General trade or cross-border e-commerce. The decision depends on category characteristics, product ingredients, tariff rates and regulatory compliance. General trade generally imposes higher requirements, permits fewer ingredients and applies stricter compliance rules, including requirements relating to animal testing.
- Choose channels and platforms: Cross-border e-commerce is limited to online cross-border channels such as Tmall Global, JD Worldwide, Pinduoduo Global, Douyin Cross-Border and Xiaohongshu Cross-Border. General trade can use online or offline channels, with many more options covered in earlier articles.
- Settle the remaining details: Payment settlement, supply chain and payment terms. There are many variations. If the brand itself is the operating entity for cross-border e-commerce, a consignment platform may settle only for products actually sold and apply longer payment terms. International freight can move by sea, rail or air, under terms such as CIF or FOB.
Given China’s overall complexity, is there a simpler methodology that can help international brands make decisions faster, more efficiently and with less risk? We will discuss that next.
GANDE · Insights