How to Sell to Chinese Consumers Through Cross-Border E-Commerce Platforms
China’s e-commerce market is booming, and demand for foreign imported products will continue to rise as China’s middle class grows. From a policy perspective, China is actively expanding cross-border e-commerce by establishing bonded areas and e-commerce pilot zones, which facilitate the import and export of goods. To help foreign merchants seize this opportunity, we provide an overview of the requirements, regulations, and platforms through which to sell to China online.
China is the world’s largest e-commerce market. In 2021, cross-border e-commerce (CBEC) imports and exports reached a total of RMB 1.98 trillion (US$277.3 billion), a year-on-year growth rate of 15 percent.
China has also been actively promoting the development of CBEC for many years, expanding the number of CBEC pilot zones to reach a total of 132 across the country.
Moreover, as standards of living rise in China, the consumer base for CBEC – and imported products – will only continue to grow. we also offers a much more accessible and straightforward means of reaching Chinese consumers, with fewer administrative hurdles and streamlined application procedures offered by China’s booming e-commerce platforms.
To help foreign companies seize on the opportunity of China’s growing cross-border e-commerce market, we provide a brief guide to the platforms, requirements, and processes to start selling products to Chinese consumers.
How and where do Chinese consumers buy imported products?
Chinese consumers generally buy imported products the same way they do all other online shopping – on their phones. Mobile applications have a much higher penetration rate in China than web pages, and most brands will have both their own standalone apps as well as mini-programs integrated into WeChat and other super-apps (more on this below).
There is a vast range of platforms dedicated to importing products for Chinese consumers. Some of China’s largest e-commerce platforms, such as TMall (owned by Alibaba) and JD.com run platforms specifically for consumers to buy overseas products and services.
Some of the most popular platforms for buying imported products are TMall Global (天猫国际), Kaola (考拉海购), JD Worldwide (京东国际), Ymatou (洋码头), and Amazon Global (亚马逊海外购).
Do I have to establish a domestic entity to sell to China?
You do not need to establish a legal entity to set up and run an online store on an international e-commerce platform to sell products and services to Chinese consumers. Prominent international e-commerce platforms are TMall Global, and JD Worldwide.
However, most e-commerce platforms will require business registration from another country, and may also ask for information on your company and brand, including sales, websites, product information, and more. For this reason, it is advisable that you already have an established business in another country before you start trying to sell your products in China, rather than launching a new China-only business.
To sell products on a domestic Chinese e-commerce platform (including the domestic versions of the international e-commerce platforms), you will need to set up a legal entity in China.
There may come a time when it would be beneficial to set up a legal entity in China, even if it is not required. Whether or not you choose to set up a legal entity will depend on how big your operations are and how invested in the Chinese market you want to be. If you wish to expand operations after finding initial success, an established presence in China may make larger operations easier. Before doing this, however, you can also choose to hire some local employees via a local agency to help with administrative matters and other on-the-ground operations, which you do not need to have a legal entity to do.
Although foreign merchants are not required to set up a legal entity in China, they are required by law to entrust a company to handle industrial and commercial registration in China. This company will undertake responsibilities, such as registering with China customs and undertaking liabilities, ensuring truthful and accurate declarations, and accepting supervision by relevant authorities, among others.
Many of the e-commerce platforms will offer services to help merchants connect with local companies or may act as the local company that undertakes these liabilities. If the platform does not provide these services, you may have to find a local company yourself or hire an agency to handle these matters.
How do I sell to China through us?
The most direct way to sell products to Chinese consumers is by setting up a storefront on an international e-commerce platform. This will require some level of expertise and language skills as you will need to localize your product information, marketing materials, and other online communication materials so that your Chinese customers can navigate your store. If you do not already have a person who knows Chinese on your team, you may choose to hire a person in China to handle the Chinese language aspects of the operations or outsource your translation and customer service requirements.
Alternatively, you can choose to sell your products to a wholesaler or directly to the platform, which can then take over the management of subsequent operations. Platforms such as TMall Global, JD Worldwide, and Kaola all provide wholesale or supplier services for overseas merchants. By choosing this route, you will essentially outsource all operations to the platform, requiring less work on your side.
It is also important to carefully choose which platform to sell your products on, as different platforms will specialize in different products.
How can foreign sellers set up an online store to sell to Chinese consumers?
The process for setting up a store will differ slightly on the various platforms and may involve contacting the platform’s service teams. Some of the platforms also don’t have an English version of the platform, so if no one on your team can read Chinese, you may need to employ a third-party agency to help you get set up.
Below we provide an overview of how to set up online stores to sell to Chinese consumers on some of the main e-commerce platforms.
Open Your Taobao Store
The Alibaba-owned taobao is the international version of the popular e-commerce platform. To set up a store on TMall Global, you must submit an application to check whether your products and brand are eligible. Currently, the only product categories available for overseas sellers are:
- 3C products (computer, communication, consumer electronics)
- Cosmetics
- Fashion
- Food
- Health
- Home
- Mother and babycare
- Personal care
- Pet products
The eligibility criteria are somewhat opaque, and ask simply for the products and brands to be “high quality”.
If the application is successful, you will be able to activate an Alipay Global account to accept payments and launch your store. You will also be required to pay a security deposit of US$25,000 and an annual fee of between US$5,000 and US$10,000, depending on your product category. Interested merchants can apply to set up a storefront here.
Alternatively, if you do not want to handle sales yourself, you can choose to sell your products to the TMall Direct Import team, which will then manage operations in China. The initial application procedure for the store can be done here.