samedi 13 octobre 2018

Guide To Effectively Distribute Your Products In China

in recent years, China has liberalized its distribution system to provide full foreign trade and distribution rights to foreign companies in most industrial sectors. The new laws removed previous restrictions on size requirements for commercial and distribution companies, opening the door for competition for small businesses.

Tips To Distribute Your Products In China

 The outright ban on foreign-invested enterprises importing, exporting and distributing goods in China has improved, but the licensing and approval process remains difficult, time consuming and is extremely opaque. A standard commercial license is usually issued by the municipal administrations of industry and commerce.

The distribution rights of these industries are often approved by a higher authority, such as a municipal or provincial trade commission. This effectively adds another layer of bureaucratic hurdles to US companies.

Special trade zones, such as the China Pilot Shanghai Free Zone, launched in 2013, and the Tianjin, Fujian and Guangdong Free Trade Zones, are currently experimenting with regulatory reform and sectoral pilot projects that could increase market opportunities.

distribution and sales channels for international companies. In principle, all free zones are supposed to have the same rules, each with its own specialty (Guangdong, support trade with Hong Kong and Macao, Fujian, promote trade with Taiwan, Tianjin, strengthen economic integration in the north between Tianjin / Beijing / Hebei and Shanghai - focus on innovation).

International companies expressed disappointment with the speed and scope of regulatory reforms, but congratulated the Free Zone's administrators for their increased responsiveness and communication in certain industrial sectors, particularly with regard to customs clearance. Sales channels available to foreign companies selling in China include trading companies, distributors and local agents. Commercial companies holding import / export rights facilitate customs formalities; distributors establish sales channels and manage inventories and inventories; and local agents sell products to consumers

Sales and distribution networks in China evolve

With the increasing privatization of distribution channels, sales in China have increased exponentially. Retail sales alone increased from 4.3 billion yen ($ 520 billion) in 2001 to 12.5 billion yen ($ 1.8 trillion) in 2009, with annual growth of about 12, 5%. Last year, retail sales grew 16.9% over 2008, despite the global economic slowdown, according to the PRC's National Bureau of Statistics. A PRC Ministry of Commerce official (MOFCOM) said in November 2009 that China's retail sector is expected to grow by 16 percent in 2010. A report published in April 2010 by the Boston Consulting Group indicated that "Increasing the number of middle-class and wealthy households would double consumer purchasing power in nearly a quarter of China's cities and counties over the next decade." to reach 70% of this segment, it must be present in nearly 240 sites, and in more than 400 by 2020.

Many companies are marketing their brands beyond the big cities to meet growing demand. More than 160 cities in China have at least one million inhabitants. Some companies, such as Adidas-Salomon AG and Nike, Inc., have already implemented strategies to enter small towns. These developments and forecasts imply that Chinese companies will have to significantly expand and strengthen their distribution and logistics capabilities, either on their own or through third party suppliers. In addition, the Chinese government's efforts to boost consumption will reinforce these trends.

Logistics is changing

In recent years, the Chinese government has invested heavily in the country's logistics infrastructure. China has spent nearly 40 percent of its 2008 economic stimulus package (1.5 trillion yen [$ 219 billion]) on developing public infrastructure. In 2009, China built or upgraded 156,000 rural stores and 1,100 distribution centers across the country, according to China. China now has 420,000 rural stores that cover 75% of communes and 50% of administrative villages.

Over the past decade, China has invested in improving infrastructure in the cities of the interior, with a focus on building large cities within major logistics and distribution centers. For example, Wuhan in Hubei becomes the multimodal logistics center of central China. The city has one of China's largest inland ports, carrying up to 40 million tons of cargo a year, with shipping routes serving 14 countries. National highways and railway lines connect Wuhan to other major Chinese cities. In May 2010, the Wuhan government announced an investment of 14.6 billion yen ($ 2.1 billion) in Wuhan Tianhe International Airport, which will increase the airport's cargo capacity to 400,000 tons per year. Many large multinational companies, such as Coca-Cola Co. and Kimberly-Clark Corp., have made the city a key strategic distribution center. Other inland cities developing similar centers include Anhui, Chengdu, Sichuan; Heilongjiang, Chongqing; Xian, Shaanxi; YUnnan and Zhengzhou, Henan.

Tips for connect with Distributors 

Alibaba can change the distribution in China. 

The development of effective sales and distribution channels is essential for companies targeting the Chinese market. When developing sales and distribution channels, companies must take into account Guanxi Networks and personal relationships are an important part of a successful distribution strategy in China (see Marketing and Sales to Chinese Enterprises). Chinese "networks" are often small and exclusive, especially at the local level, where they can only be composed of a handful of decision-makers.
Developing personal relationships with these people is particularly important for the development of distribution channels. Distribution Partners Businesses need to analyze potential distribution partners, paying particular attention to significant material movements in China, as poor inventory positioning and stockouts can damage the brand's reputation.
Effectiveness In many cases, responsibility for distribution operations initially lies with the distributor without identifying clear procedures or objectives. Companies that use material flow mapping, particularly in rural China, with relatively sophisticated logistics, inventory-in-transit and distribution capabilities, are likely to be more efficient and able to deliver the materials themselves. goods on time and with a minimum of loss or damage. Mapping helps identify each part of the supply chain and which actor is responsible for what.
By graphically mapping material flows, companies can more accurately assess metrics that directly affect service levels and costs.
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