China Distributors: 50 tips to identify the good ones
You want to find a distributor list, you want to contact agents, importers, resellers in China… and you need Tips. This Article is for you.
Distribution in China: a headache for western Brands
One of the most common methods for foreign companies seeking to sell and distribute products in China is to use a local distributor. A main step for company looking to expand to China is therefore to build a strong and serious relationship with a competent distributor.
They work with margin
Unlike sales agents, distributors buy goods from a supplier and resell them to local users. They receive a margin on products that they sell. The distributor can also sell to other wholesalers who then sell to local retailers or end users.
A complicated process of decision
The company must consider several important parameters before deciding whether to choose an agent or distributor to sell their products in China. Distributors are often a good option because they hold stock; they also have greater influence to sell the product.
Costs of distribution in China
Distributor earns money by adding a margin to product prices. Their margins are generally higher than agent fees because distributors have larger costs, such as for storage of inventory.
Marketing is the Key
Generally, a distributor takes on the responsibility of marketing which is a MISTAKE . Do you ask Carrefour or Auchan to take care of your marketing in your country ? Marketing needs to be discussed in detail with a potential partner, confirm if the distributor will do marketing and what their role will be to promote the product.
They just want to resell good products
In China, the distributor’s roles are different. In fact, Chinese distributors are not in charge of promoting your brand image. If your products are not interesting Chinese consumers, they will no longer sell them.
Online distribution channels a new way
The rapid expansion of the Internet in China, with more than 900 million internet users, has contributed to the development of many online distribution channels.
Alibaba.com Ltd. and its subsidiary Taobao.com reach a large range of customers. In April 2010, Taobao recorded more than 190 million users. The combination of Alibaba and Taobao created more business-to-business and business-to-consumer opportunities.
Exclusive Online Distributor
Foreign companies are also expanding into this market thanks to the online distributors such as JiGoCity.com. JiGoCity works with a large network of consumer service companies to give the opportunity to customers of buying directly through their expanding network of online users.
Steps to attract distributors in China
Show that your product is very relevant to the Chinese Market
Distributors will not sell your products if they think Chinese customers won’t be interesting by them. You have to present your brand’s image on Chinese websites or social media in order for consumers to learn more about your products and services.
Cross-border websites: a good test
You can start selling your product to Chinese consumers even without a distributor. You just have to integrate on Chinese e-commerce platforms, and consumers will be able to find your products.
Boost your Visinility
Once you have found distributors for your product, you have to set up a strong digital marketing campaign. This is a crucial step.
Think long term with digital Marketing
Selling your product in China, isn’t very easy, the process could be long. Therefore you need to engage your customers on your products. Build a good relationship with them, communicate, listen about their expectations and their needs. Digital channel is your best solution for that, especially on the Chinese market where apps and social media are a part of daily life of consumers.
Three Tips for Distribution in China
Guanxi & efficienty
For companies targeting the China market, it’s crucial to develop effective sales on the Chinese distribution channels. For better sales, companies must consider carefully these three important tips:
- Guanxi: build a good relationship with your consumers is an important asset of a successful distribution strategy in China.
- Distribution partners: Companies have to pays attention about the potential distribution partners, before to product movement in China, because bad inventory positioning can harm company reputation.
- Efficiency: Generally, responsible for distribution operations is placed on the distributor without fixing clear procedures and targets.
Face to face meeting
It is important to meet the distributor in person before you sign any agreements. As you probably aim for a long term relationship, you should consider the possibility to meet the distributor in person before to establish any partnership. During this visit, you will be more able to evaluate their abilities by asking right questions.
How can you find a distributor?
- Attend a trade show.
- Participate to Business networking like the Chinese Business Club
- Analyze other companies and see which distributors they have partnerships with.
- Through advertising (marketing agency).
A well-established company, energetic, flexible, innovative with a good network of contact could easily help you to find a right distributor.
Some important factors before choosing a distributor include:
- Do they have strong networks and contacts? Do they have guanxi (relationships) with the right people?
- With is their experience in that sector? Do they have good knowledge and have they represented a similar product previously? Can they help with marketing? for more detail click here
Need a partner in China ?
We can be your eyes in China. GMA are a specialist of distribution with seven years of experience.
We can help you to see clearly what is the right distributor for you.
We can manage this process for you and give you more relevant idea in this sector.