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.
Catering Artisan Cuisine to Chinese Palettes
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.
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
Importing Bottles of Health to China
Healthy Imports is an Irish enterprise that specialises in importing and distributing healthy high quality food and beverage products from the EU into mainland China. After successfully establishing a WFOE Company in Dongguan China, the company made sure it was only working with competent and trustworthy sub-distributors and was very careful on how the products were marketed. Its biggest achievement is the successful marketing and distributorship of Rocwell Mineral Water. Many European F&B producers are searching for a reliable and experienced agent in China and the demand for their products in China is high. Healthy Imports managed to take advantage of this high market potential on both sides: the enterprise is expanding with a second office in Shanghai, hiring more employees at the same time.
One of the key factors of Healthy Imports’ success is its good preparation and patience in making the correct decisions that is vital to success in China.
During research, the team often resorted to the EU SME Centre’s Knowledge Centre. When making important decisions on their China strategy, the management enquired with the Centre’s legal experts in order to confirm the information they previously gathered. The detailed and practical replies made them feel more secure and confident in their decisions, Healthy Imports CEO Noel Farrell recalls.
“To succeed is to understand and adapt”, the company’s motto, highlights one of the key factors for its success: The team was conscious of adapting to the local business culture and never stopped learning. Healthy Imports has shown that if there is market potential for your product and you enter the market well prepared, big success and considerable growth are more than possible.
The EU SME Centre gives SMEs a sense of security. It is great to be able to enquire in one place about diverse questions of interest for an SME in China. The ‘Knowledge Centre’ is the only database that provides all relevant information in one place, from practical advice like dos and don’ts in negotiations to legal information in the law database.
－Noel Farrell, CEO Healthy Imports LtdVisit Healthy Imports website
Exporting Greek Soft Drinks to China
Green Cola is a Greek soft drink brand that produces cola products with natural ingredients, containing fewer calories while maintaining the cola taste.
In the late 2014, Green Cola was introduced to the Chinese food and beverage market with the support from the importing company Fortune Park (Beijing) Trading Co. During the next few months, Green Cola conducted a series of market research on Chinese consumers’ preferences in soft drinks and found out that the country has a growing number of consumers seeking healthier and fashionable products with great flavors from other countries. In 2015, Green Cola began to export a few containers to different ports in China and to sell directly in the imported commodity centers mostly located within Free Trade Zone areas and high-end super markets.
In November 2015, Green Cola exhibited for the first time at the World of Food Fair in Beijing within the Centre’s European SME Pavilion. The World of Food is one of the largest international food & beverage trade fairs in Northern China.
During the exhibition, the Centre introduced Green Cola to Emmanuel Stantzos, Minister Plenipotentiary for Economic and Commercial Affaires at the Greek Embassy in Beijing, and arranged a series of individual business meetings with Chinese distributors, retailers and buyers.
“Attending the exhibition and the Centre’s European SME Pavilion provided us with a good opportunity for the brand to get direct feedback from consumers in terms of flavor preference and price elasticity. It also helped us gain more valuable contacts and expand Green Cola’s sales channels in China”, said Mr. Jay Xu, Managing Director of Fortune Park Trading Co,.
Jay stressed that logistics is often the primary challenge for imported fast-moving consumer goods in China. In addition, the speed to market and fast delivery to consumers are the key to success.
“There is no doubt that the China market is one of the most attractive for all prospective exporters. But it has to be approached with a long term perspective and with respect to the culture and to the consumer habits. For us, this means that it is significant to present a selling proposition that will bring an added value to the Chinese consumers. But no matter how good this proposition is, no exporter can succeed without the right associate from the China side”, said Antonis Terzis, Export Manager Green Cola Hellas S.A.
The next step for Green Cola is to make the products available for more consumers by distributing through different sales channels. To achieve this, Green Cola is working to have the Chinese label printed directly on the bottle to comply with China’s new food labeling regulations. (Find further instructions for China’s food and beverage labelling requirements in the Centre’s Guideline.)
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 ABVisit Gothia Logistics AB 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
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 CoVisit Cambridge Mask Co
Getting the First Container of Beer from the UK to China
Lancaster Brewery is a British company producing and selling a variety of beer products such as ales and ciders, located in the North West of England.
The company entered the Chinese market in July 2016, successfully reaching the country and clearing the customs in less than a month. It targets Guangdong province to start with but plans to expand business in other first-tier Chinese cities with a focus on Shanghai in the near future.
Lancaster Brewery is currently exporting to China with the assistance of a local Chinese business partner who is handling the process of customs clearance and relabelling in bonded warehouses. The company has also planned to send an employee to Guangzhou for a period of six months to represent the brand in the market, provide support to the partner and develop a network of distribution channels.
During their market research process, Lancaster Brewery came across the EU SME Centre’s content online, including the webinar on Alcoholic Drinks Market in China and publications on the Food & Beverage Market in China and Ways to Enter the Chinese Market. The information helped the company better understand the technicalities of exporting products to China and to clarify the requirements for labelling, customs procedures, and intellectual property protection in China.
The Alcoholic Drinks Market in China webinar, held on May 10th, provided me with crucial data to pitch the China opportunity to our company board and win their approval.
- Giulia Ravasi, International Export Manager at Lancaster Brewery
Lancaster Brewery aims to position its brand in a niche market in China to attract affluent consumers, including expatriates and Chinese who have previously worked or studied abroad and therefore have developed a taste and preference for foreign food products and brands.
As advice for other European businesses interested in the Chinese market, Giulia emphasised on the role of establishing trusted relationships with Chinese business partners, doing market research and willingness to look for help.
“Do your research and look for help. Sometimes SMEs lack the specific knowledge and skills required for such a challenging process, but help is available out there to overcome these obstacles and barriers”, said Giulia.Visit Lancaster Brewery’s Website
Getting Chinese Tourists on Board
In 2012, over 83 million Chinese tourists travelled abroad and spent more than €75 billion overseas, making China the world’s largest outbound tourism market. Dreamboat, a Czech SME providing travel services for tourists and business groups from Asia, began to gain a foothold in this booming market in 2012. The company identified European cruise trips as a niche market that has not yet been fully exploited in China, and began to partner with Chinese companies and the Czech Tourism Office in China to organise Danube River cruise trips for Chinese tourists.
The EU SME Centre supported Dreamboat during its early stage of establishment in China. The Centre’s free hot-desking service provided its staff a professional working environment while it was developing partnerships with local travel agencies in Beijing. The Centre’s guidelines and webinars explaining changes in China’s visa rules also kept the company informed of updates that affected its employees working in China.
Among the advice offered to SMEs preparing to do business in China, Zofia Guranova, the company’s China sales manager, mentioned that conducting proper due diligence on potential Chinese partners is one of the most important first steps to take.
“I can highly recommend the Centre’s hot-desks to any European SME that wants to start up a business in China or is coming to Beijing for a business trip. The Centre also offers benefits that I personally find really helpful - for instance a consultation with an experienced specialist in both the legal and business field. Moreover, the location is perfect and the atmosphere is really friendly; the staff is always willing to help.”
－Zofia Guranova, Sales Manager, DreamboatVisit Dreamboat website
Meet the EU SME Teams
Our BD team helps to raise awareness on the key sector opportunities for European SMEs in China and potential challenges to watch out for. We help you to better understand the commercial environment across various industries, providing tools to develop and market your business as well as assisting you to locate service providers.
Our in-house lawyers provide first line information on the legal environment in China. We offer confidential advice on legal issues with a focus on contracts, taxation, preliminary due diligence, entry modes, payment conditions, labour, dispute settlement and access to finance.
Our standards experts are on hand to help you navigate China’s standards and conformity assessment procedures. The team is here to help smooth the way for you to get your goods, services and technology through Chinese customs and onto the market.
One of the key challenges for businesses in China is human resources. The Centre’s HR team provides advice on hiring and retaining staff, salary levels and available training services relevant for your company in China.