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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

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 Ltd

Visit Healthy Imports 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

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

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

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

Slovenian Tech Dynamises China's New Energy Vehicle Market

Background

Elaphe Propulsion Technologies Ltd.is a Slovenian company and a global leader in development and production of in-wheel and direct drive propulsion systems for vehicles. In October 2015 Blaz Stefe, today general manager of APG-Elaphe Propulsion Technologies, Co. Ltd, contacted the EU SME Centre in Beijing.  Mr Stefe wanted to understand better several aspects of entering the Chinese market, local legislation, business development and partnering with Chinese companies. 

What We Did

Mr Stefe met at the EU SME Centre in Beijing Ms Hyklova, Legal Advisor, and Mr Jimenez, Business Advisor. He received advice on legal and procedural aspects of creating a Joint Venture (JV), was recommended to pay attention along with his lawyers to some of clauses, location implications for the JV were discussed, while the EU SME Centre also shared information about the New Energy Vehicle (NEV) market opportunities in China, which in 2015 were not that clear as they are today.

Success

The Chinese investor partnered finally with Elaphe and a JV company was established in August 2016, which is today leader in the production of in-wheel motors for passenger and heavy duty vehicles. Operation of production line started in January 2018 in Hangzhou.  

"We appreciate the quality information available at the EU SME Centre, and certainly we will accept the proposal of the EU SME Centre to draft a Case Study so our experience in China can be shared with others for the benefit of EU SMEs."
-Blaz Stefe, General Manager of APG- Elaphe Propulsion Technologies, Co. Ltd.

Visit Elaphe’s 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

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, Dreamboat

Visit Dreamboat website

Pampering Tianjin Expats with French Cuisine

Maia Orgogozo fell in love with Tianjin during her first visit of the city. She then spent more and more time there before eventually moving over from France. She realised some foreigners in Tianjin love the city very much, while some are homesick.  In order to contribute to the happiness of both groups, she decided to make use of her cooking skills and opened a restaurant. 

After almost two years of conducting all necessary registrations and setting up her business, Oh My Gourmet became operational in 2012. With Oh My Gourmet, Maia does not only offer dining at the restaurant, but catering, private dining and cooking lessons as well. Step by step, Maia managed a healthy growth of her business, always focusing on ensuring the top quality of service and food. The business is thriving, being amongst the top five rated restaurants in Tianjin on the website of TripAdvisor. 

This success is based on the very hard work of the French entrepreneur. Maia said: “For an entrepreneur, there are new challenges every day, there is always work to do. You do not really have the time to sleep and can forget your social life in the first year of a new start-up, apart from that concerning work. It is very tough.” The second key factor to Maia’s success is that she rather invested more time in the beginning to ensure that her business is set up properly and compliant with all laws. Maia was not deterred by the long registration process, she feels that: “Those legal procedures take long everywhere in the world, it is just that China gives the idea that there are lots of possibilities for short cuts. This might be the case for locals but certainly not for foreigners.”

To ensure the legal compliance at all time, Maia needed the help of the EU SME Centre. After going through all the relevant guidelines on the Centre’s website, she enquired with the Centre's legal experts. In order to find out the exact scope of Oh My Gourmet’s business license, the Centre’s legal expert launched an enquiry with officials in different cities and in the end secured a definite answer from officials in Tianjin. Maia appreciates the reliable and independent advice from the EU SME Centre and says that it helped her a lot during the initial phase of setting up her business.

When asked about the advice that Maia would like to give other European entrepreneurs in China, she recommends: “The competition in Tianjin as well as in China is very tough. There are new obstacles and challenges to your strategy and original ideas every day, so many things make you doubt. It is easy to lose focus on the original plan. It is of course important to stay flexible, adapt your product and strategy to each situation, but it is very important to stay focused, too. Never lose track of your goals and do not get distracted.” 

Chinese legislation and regulations are often not very clear and the Centre was a great help in assuring me of what is allowed and what not. They conducted a real legal investigation for me; I myself could never have done that because I lack the knowledge and resources.

-Maia Orgogozo, Founder&CEO, Oh My Gourmet 

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

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