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Success Stories

Among the three million European SMEs that are exploring the global market, more and more are succeeding in China. Read their stories below to find out how they have benefited from the services at the EU SME Centre and made their first entry successfully in China. 

Success Stories

Spanish SME Brings New Functional Ingredient to China

Entering new active ingredients into the food or health industry market can be hard, in particular if the company is trying to export its products abroad. For the case of China, market access regulations can be of great complexities. 
Asking for assistance in these regards, the Spanish company Lipofoods contacted the EU SME Centre. The representative of the enterprise discussed with our experts about the imports of a phytosterols in 2017, a specific functional ingredient with cholesterol lowering effects. Following further consultations, the company managed to master the modalities that need to be followed in order to export its products to China. This understanding affected the positive growth of the company’s exports of calcium to China in 2017, another functional ingredient produced by Lipofoods. 
Recently, Lipotec – the company from whose spin-off started Lipofoods- attended the EU SME Centre’s training “How to Set Up a Cross-Border WeChat Shop”, held in Barcelona.  The company contributed to the discussions of the training by providing their own experience with Chinese market access regulations. They shared with us that a well-known cosmetics firm has just started to sell online in China a cosmetic with some of Lipotec's active ingredients..
“I personally consider the EU SME Centre as a great support for European Companies in order to have a better understanding of the complexity of China, in terms of regulatory, trends, culture, society and business. I really appreciate the great support of the EU SME Centre and especially from Rafel Jimenez Buendia, for his personal and professional help.”

Background

Entering new active ingredients into the food or health industry market can be hard, in particular if the company is trying to export its products abroad. For the case of China, market access regulations can be of great complexity. 

What We Did

Asking for assistance in these regards, the Spanish company Lipofoods contacted the EU SME Centre. The representative of the enterprise discussed with our experts about the imports of a phytosterols in 2017, a specific functional ingredient with cholesterol lowering effects.

Success 

Following further consultations, the company managed to master the modalities that need to be followed in order to export its products to China. This understanding affected the positive growth of the company’s exports of calcium to China in 2017, another functional ingredient produced by Lipofoods. 

 

Recently, Lipotec – the company from whose spin-off started Lipofoods- attended the EU SME Centre’s training “How to Set Up a Cross-Border WeChat Shop”, held in Barcelona.  The company contributed to the discussions of the training by providing their own experience with Chinese market access regulations. They shared with us that a well-known cosmetics firm has just started to sell online in China a cosmetic with some of Lipotec's active ingredients.

I personally consider the EU SME Centre as a great support for European Companies in order to have a better understanding of the complexity of China, in terms of regulatory, trends, culture, society and business. I really appreciate the great support of the EU SME Centre and especially from Rafel Jimenez Buendia, for his personal and professional help.

-Iván Marcos Peláez, Area Sales Manager APAC, lipofoods

 

Visit Lipofoods Website

Exploiting China’s High-end Anti-pollution Mask Market

Christopher Dobbing, a young entrepreneur from the United Kingdom, launched his anti-pollution mask business in China in 2013. As the Founder and CEO of Cambridge Mask Co, the company targets the high-end anti-pollution mask market. Now selling masks through a number of local hospitals, schools, corporations and retailers around the world, Chris has successfully diversified his distribution channels both online and offline. 

In his preparation to set up a company in China, Chris used the EU SME Centre’s consultation service to understand the company registration process and certifications needed to sell his masks on the China market. The Centre also provided him free temporary office space while he was looking for affordable offices in Beijing.

As to the challenges faced by European SMEs in China, Chris put recruiting and retaining staff as the most pressing one. Instead of having three underperforming staff, Chris suggested SMEs invest more in the most dedicated one.

The EU SME Centre was a valuable resource to help me accelerate my start up business selling anti-pollution face masks in China. Having a professional looking space to hold meetings in central Beijing is great, and the legal advice and information guides have proved to be really useful at this key point in setting up here. I would highly recommend the Centre to any small business looking to get started here.

-Christopher Dobbing, Founder and CEO, Cambridge Mask Co

Visit Cambridge Mask Co

Supporting Chinese Hospitals with Clinical Products from Ireland

The Irish company Serosep is a leading producer of laboratory diagnostic products that are broadly used in hospitals and clinical practices. After identifying China as a market with huge potential for their products, Managing Director Dermot Scanlon and Export Sales Manager Eoin Kelleher had the idea of opening up a wholly foreign-owned enterprise (WFOE) in China. However, after attending a seminar of the EU SME Centre and enquiring several times with the Centre’s experts, they realised that it would be better to start with working with a distributor instead.

Dermot and Eoin then found Beijing ALT Biotech, a Chinese distributor with knowledge of the healthcare market in China. Together they completed the lengthy process of registering their company and products in China. This took more than 6 months, but then sales could finally start in China. At the time of the interview with Eoin, he expected the first order to be coming in the following weeks and it shipped from Serosep in May 2014. For the beginning the target clients are private practices and laboratories that work for private hospitals.

Serosep first got to know the EU SME Centre through another Irish SME. They took part in many of the Centre’s webinars and used the documents in the Knowledge Centre on the EU SME Centre website. In the beginning they sent several enquiries about setting up a WFOE in China through the Ask-the-Expert service. The information they received from the Centre made them change their perception of how to do business in China and how difficult it would be to enter the market. It directly impacted Serosep’s change of strategy.

We appreciated the competent advice from your experts very much. The seminar was brilliant. The legal expert who held it could answer every single detailed question. We left without one open question still in mind.

-Eoin Kelleher, Export Sales Manager, Serosep 

Visit Serosep Ltd. website

Adapting Mediterranean Food to China

UR Great is a Greek company specialised in the production and sales of healthy and natural Mediterranean food products. The founder and owner Mikis Pollalis wants his brand to relay the image of a traveler bringing healthy Mediterranean food back from his holiday.

As many others, UR Great took notice of the huge potential the Chinese market offers. They decided to make entering this market their strategic priority and began researching on this topic. At this time, Mikis attended an EU SME Centre presentation in Athens.  He learned there that good preparation is paramount to success in China, thus he started to gather information on the food and beverage market. After researching Chinese tastes, he prepared his team back at home ready to adapt the marketing strategy, especially the products, to suit the Chinese market. 

The EU SME Centre was able to offer different types of help at different stages. The presentation by one of the Centre experts was an eye-opener for the founder of UR Great, since it showed that many different aspects needed to be considered when entering the Chinese market and that preparation was a prerequisite for sustainable success. Mikis says the take-home message from this event was “a company should be ready to enter China and a lot of preparations are required”. 

He continues to use the free services of the Centre and rates them highly. The webinars provided him with reliable and relevant information he immediately incorporated in his strategy and action plan. As a final step, the CEO of UR Great approached the Business Development experts via the Ask-the-Expert feature on the EU SME Centre website. Upon their request, they received a list of potential food importers. 

I believe that the most important help of the EU SME Centre is that it provided a helpful framework for entering the Chinese market. It set from the beginning the correct foundation, by pointing out the important key learning facts regarding business in China and helped us create a roadmap to entering the Chinese market. Moreover, we received valuable knowledge from the experience of the EU SME regarding the pitfalls and problems we should avoid. 

Mikis Pollalis, Founder and CEO of UR Great

 

Visit UR Great website

Taste of Galicia in China

The Galicia Food Cluster is a non-profit association that provides support services to food and beverage companies from Galicia in Spain. In September 2013, the Cluster successfully established itself as a Wholly Foreign Owned Enterprise (WFOE) in Shanghai in order to better serve a growing number of Galician SMEs interested in the food and beverage market in China.

The move to establish a WFOE in Shanghai was not a snap decision for the Cluster; instead, it involved over one year’s comprehensive market research and strategic business planning. As a crucial first step, the Cluster carefully compared the pros and cons of different legal entity options available for foreign organisations in China, such as a WFOE, a Foreign Invested Commercial Enterprise (FICE) and a Representative Office (RO). The Centre’s legal team helped the Cluster evaluate the feasibilities of each legal entity option, and revealed the difficulties for a foreign association to register a WFOE in China. As a part of the solution, the Centre’s legal advisor suggested the Cluster to register a company in Spain and then have this new company register a WFOE in China. 

As to its future plan, the Cluster aims to expand its network in China step by step and develop more partnerships between Galician food and beverage SMEs and their Chinese counterparts.  

Visit Galicia Food Cluster website

Expanding Research & Development Partnerships in China

The International Centre for Numerical Methods in Engineering (CIMNE) is a Spanish public R&D centre aimed at the development of numerical methods and computational techniques for advancing knowledge and technology in engineering and applied sciences. CIMNE is now expanding its R&D partnerships and promoting technology transfer activities in the Chinese market. Since its first project in China in 2005, CIMNE has successfully increased its activities through a company created in Beijing in 2013.

The EU SME Centre has provided critical support both in the course of establishing the company and in the subsequent business development process. Given the different practices and legal framework between China and Europe, legal compliance is a real challenge for any European SMEs willing to set up a base in China. CIMNE was able to confirm the advice obtained by independent consultancy firms on legal procedures for the company establishment. Through consultation services with the EU SME Centre, the company was reassured about its legal compliance in China.

CIMNE also received specialised advice in the ICT sector. The Centre helped the company to understand unique aspects of the Chinese market, which allowed it to adapt its operations to the local environment, redesigning the business strategy as well as revising key content for contracts signed in China. In addition, CIMNE has taken advantage of several matchmaking events organised by the Centre, by meeting with new business partners.

The EU SME Centre provides highly professional assistance. Their services are as spotless as those you might get from independent consultancy companies. For any corporate manager facing a new environment such as China, I would always recommend to double-check some key decisions with the EU SME Centre.

Sònia Sagristà, General Manager, CIMNE (Beijing) Technology Consulting Services Co. Ltd.

Visit CIMNE website

Tapping into China’s Corporate E-Learning Market

Gothia Logistics AB is a Swedish company that develops online training programmes in logistics, lean production and purchasing in order to help clients increase efficiency and improve productivity. Active in China since 2003, the company has been offering online training courses in both English and Chinese for employees in factories around the Yangtze River Delta region.

With the help of the Centre’s business development team, Gothia Logistics found a list of companies to participate in a research project on the difference in continued education between companies with various cultural backgrounds.

The Centre’s webinar on “How can foreigners establish an office in China?” helped the company acquire essential information on setting up a legal entity in China. Gothia Logistics also received comprehensive advice on employment arrangement forms available for wholly foreign-owned enterprises (WFOEs) in China.  

We used a great deal of services from the EU SME Centre’s website, especially the online enquiry service which allowed us to ask more specific questions on HR & legal issues. In addition, the Centre’s webinars are good sources of more resources. The EU SME Centre has been a great support for us when setting up our business in China. 

 

-Kjell-Åke Rönnberg, CEO, Gothia Logistics AB

Visit Gothia Logistics AB website

Accessing China's Fashion Market

Just Campagne is a family-run business based in France, designing and making 100% hand-made leather bags and accessories. With three boutiques, two in Paris and one in Biarritz, the company is looking to develop in the Asian market, in particular in China.

In their early days in China, they carried out a market study in Beijing by organising private events for potential clients to show them their products. The feedback that Just Campagne received after the events was very positive and encouraging.

Célia Berkouk, Head of Marketing & Sales at Just Campagne, first heard about the EU SME Centre during an event organised at Capital M by VIVA – a Beijing-based women’s professional network. After being introduced to the Centre and receiving advice on the Chinese fashion industry from Rafael Jimenez, the Business Development Expert at the EU SME Centre, Célia very quickly got valuable advice to get started.

“They fully understood that our product category is not aimed at the mass-market, ” said Célia. China is a high potential market for Just Campagne, because customers are in search for niche and exclusive products with great quality and service. The Centre suggested exploring in detail the showrooms scene in Shanghai which, despite being relatively recent, is a fast way to approach the Fashion Complements market in China.

 “Getting to know in detail how the supply chain works for the so-called showrooms is a bit tricky without the counselling of true experts. The EU SME Centre reacted fast informing my company to whom to contact in the Shanghai fashion scene to navigate through the world of showrooms.”

Understanding payment methods of Chinese travellers and “daigou” was also very useful for Célia. Just Campagne adopted Chinese payment methods for developing brand awareness for Chinese people travelling abroad and visiting one of the stores in France. All the boutiques accept UnionPay and the ones in Paris accept AliPay as well.

No less important was the insistence on registering the company’s trademark in China. Early on, the Centre referred Célia to the China IPR Helpdesk to seek advice on their trademark issue.

A top tip from Célia is “always check your trademark registration status in China before going any further. Small companies don’t always have this in mind straight away, but especially for Chin, this is the very first thing to be done!” 

Visit Just Campagne’s Website

EU SME Centre Supports German SME on Tax Efficiency

Background

KFIV is a commercial agency based in Germany which supplies the German and other European OEM automotive industry with high-quality components from China.

Since 2011 KFIV represented a Chinese manufacturer of automotive wire and cable.  It introduced this company to European customers and established a supplier relationship.

For this service, KFIV received a commission from the Chinese company’s sales to European customers. 

In 2014 the Chinese company informed that they were obliged to withhold a local tax for KFIV in China, at the rate of 15%.  KFIV then communicated and negotiated with the local tax authority in China. 

What We Did

In the process, KFIV sought assistance from the EU SME Centre and received clear advice from the Centre that, since KFIV did not send staff to China for the services provided to the Chinese company, no permanent establishment in China has been constituted according to the bilateral tax treaty between China and Germany. Therefore, the fee KFIV charged for the service provisions in Germany is not subject to enterprise income tax in China.

To learn more about China’s non-resident enterprise tax, read the Centre’s complete guideline here.

Success

With such information, KFIV succeeded in the negotiation with the Chinese tax authorities.

Eventually, the tax rate applied was reduced from 15% to 5%.

Quote by the company on EU SME Centre Services: 

In a China local tax issue we doubted about the statements of the Chinese partners. With the fast and competent advice from the EU SME Centre the issue was clarified, the tax was reduced from 15% to 5%. Considerable 10% savings on the commission income for our company. We greatly appreciated the extraordinary professional performance of the EU SME Centre. We are still very much grateful about your valuable authoritative advice in the tax issue with the China local tax administration.

- Karl Fischer, General Manager, KFIV GmbH

Catering Artisan Cuisine to Chinese Palettes

Marco Polo Import Export is a food & beverage company with a special focus on Spanish gourmet food. Setting foot in the China market, first in Guangzhou, as early as 2008 to export red table wines, the company saw the demand for authentic Mediterranean cuisine and soon expanded its product portfolio to a wide range of artisan food, including cured ham, fish & vegetable preserves, chocolates & sweets and frozen prepared food. Marco Polo aims to deliver not only staple Spanish gourmet to high-end hotels and restaurants, but also a fine dining experience through restaurant design and catering management. 
 
Currently Marco Polo is making progress on two frontiers: using a franchise model to sell a leading Spanish chocolate and sweets brand Torrons Vicens (founded in 1775) in Tianjin; and collaborating with more distributors for their high potential frozen prepared food products, which are easy to make, very safe, and convenient to prepare.
 
The EU SME Centre has become a primary contact point for Marco Polo in its market approach. Through the Ask-the-Expert channel, the Centre’s enquiry help hotline, our experts assisted Marco Polo in understanding standard and conformity issues for imported chocolates, provided legal advice for franchising, and helped in identifying partners for business development. The company also got the chance to attend the World of Food Exhibition (2015) in Beijing and met face-to-face with our experts there.
 
Finding the right business partners in China can be a very challenging task. The Centre helped introduce Marco Polo to local contacts, as well as to deepen their cultural understandings to obtain more valid feedback. 
 
“My tip for SMEs: get someone on your team that speaks Chinese. It demonstrates your commitment to the market and will give you an understanding that you otherwise wouldn’t get.”
 
The future looks bright; Marco Polo is now looking to open a store in northern China and is in negotiation with business partners in Tianjin, introduced by the EU SME Centre. 
 
“Our company registered with the Centre and participated in various online seminars regarding different business areas for China, which we found to be very concise and useful. Furthermore, there is always a professional reply to my enquiries from your expert team…I felt grateful to receive those comments and to know whether our company is going the right direction or not. China is known to me, however it is changing ever so fast and it is always difficult to keep up with! “
 
-Marco Piccioni, Marketing Director, Marco Polo

Visit Marco Polo website

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