Tenba Group https://tenbagroup.com/ Your Digital Link to China and the World Sun, 04 Dec 2022 11:53:19 +0000 en-US hourly 1 https://tenbagroup.com/wp-content/uploads/2019/06/tenba-group-favicon32x32.png Tenba Group https://tenbagroup.com/ 32 32 How China Sees the World – Top Overseas Destinations for Studying, Living & Co. https://tenbagroup.com/how-china-sees-the-world/ Sun, 04 Dec 2022 11:32:19 +0000 https://tenbagroup.com/?p=25090 How China sees the world and the implications of this on doing business are vastly different from Western countries. The China experts at Tenba Group are taking a deep dive into Baidu autocomplete results as well as other data from relevant Chinese online platforms and the implications for your global business. For example, did you …

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How China sees the world and the implications of this on doing business are vastly different from Western countries.

The China experts at Tenba Group are taking a deep dive into Baidu autocomplete results as well as other data from relevant Chinese online platforms and the implications for your global business.

For example, did you know that the Chinese perceive Greece’s foreign politics as exceptionally China-friendly and that they aren’t particularly fond of French cars, find Italian pasta hard, and wonder why Spain didn’t annex Portugal and Italy didn’t annex the Vatican?

How China sees the world is particularly interesting and relevant for international companies – providing services and products – because of its size (country with the largest population – 1.4 billion people) and its consequent economic strength, consumer size, and purchase power.

Table of contents

How China Sees the World

In order to better understand the Chinese views of other countries and what this implicates for overseas businesses, we will examine the Baidu autocomplete results and Baidu PPC data insight for major Western countries in combinations with keywords around foreign and overseas. Besides, we will examine further aspects of politics, the economy, and more.

Baidu searches (together with the Baidu keyword tool) are relevant as Baidu is the largest search engine in the Middle Kingdom.

Framework of Data Research & Analysis

We examined the ten autocomplete suggestions on Baidu search engine while using the incognito mode in the browser without cookies as well as the top 10 keywords from the Baidu PPC keyword tool.

The data was collected and researched in Q4/2022, just after the death of Queen Elizabeth II and British politics shuffles as well as the ongoing Ukraine invasion by Russia. The global Covid pandemic was phasing out, but the aftermath of the pandemic and global political tension had been causing economic hardship, interest rate increases, and inflation worldwide. It was during this period that the 20th National Congress of the Chinese Communist Party was held.

When analyzing the data, we have grouped the results into business-relevant categories (studying abroad, immigrating, etc.) and we have removed generic results like keywords related to the capital of a country, local time, and so on.

Summary – How China Sees the World

To begin this article, let us provide you with a summary of our findings. This in-depth analysis by Tenba Group’s China experts was inspired by this 2019 article on how the Chinese generally view other countries.

Key Takeaways

  1. The Baidu search results as well as Baidu PPC data insights reveal that Chinese netizens are highly interested in overseas immigration, tourism, and higher education. This is particularly interesting as these industries are booming now that Covid is slowly phasing out, while other industries are facing (severe) challenges.
  2. The Taobao data insight reveals that the most searched foreign product categories are fashion and food.

So, if you represent one of the following businesses or similar, the below Chinese marketing instruments are ideal for you to reach a large and interested, ready-to-buy audience for your international services and products.

Overseas businesses with high potential in China

Keep in mind that Chinese consumers are highly brand-driven, so it is wise to follow the most suitable corresponding China marketing strategies. Let’s take a look at which strategies are ideal.

China marketing solutions

Keep in mind to do your legal and localization research. For example:

  • Immigration: legal framework
  • Food: Chinese import requirements, CBEC laws, taxation
  • Higher education: international recognition of degrees

The keywords related to foreign (国外), overseas (海外), go abroad (去国外), and go overseas (去海外), show that studying abroad and immigrating to other countries (e.g. through real estate investment) are the top searches on Baidu (autocomplete) and the respective Baidu PPC insight.

  • Your Western business: overseas universities, immigration service providers, real estate agencies/agents, and digital agencies who can help Chinese businesses with marketing outside of China 
  • China marketing strategies for Western businesses to reach Chinese customers: Baidu SEO + PPC
Summary: Keyword Results Related to Overseas (Baidu Autocomplete, Baidu PPC)

Summary B: Keyword Results of Major Western Countries (Baidu Autocomplete, Baidu PPC)

Next, we have categorized the top 10 results for each of the major 11 Western countries based on the Baidu autocomplete and Baidu PPC data into the following categories. Again, studying abroad and immigrating to other countries is most popular among Chinese netizens.

In terms of monthly average searches on the Baidu PPC Keyword Tool, the top three countries are the US, the UK, and Germany (neglecting Russia on current rank one due to the ongoing war).

Chinese online users are particularly interested in studying in Australia, the UK, and Canada, as well as immigrating to Greece, Portugal, the UK, and Australia.

  • Your Western business: overseas universities, immigration service providers, real estate agencies/agents
  • China marketing strategies to reach Chinese customers: Baidu SEO + PPC
Keyword Results of Major Western Countries - Baidu Autocomplete and Baidu PPC

Summary C: Keyword Results of “Why” + Major Western Countries (Baidu Autocomplete, Baidu PPC)

The Baidu autocomplete results together with the information from Baidu PPC are relevant for Chinese people in Mainland China, seeking services (especially explanation-intense services like immigration), as well as foreign goods and niche products.

Canada has the most positive results as well as no negative results, which might be why it is so popular among Chinese for studying and immigration. Note that gambling isn’t specifically related to Canada – it’s just a play on words as Canada (加拿大) can also be read as “adding more money”.

Besides, Chinese online users positively associate the US with a strong economy but are skeptical regarding the country’s politics. UK politics are positively seen as strong and influential, but the country is negatively perceived in terms of corruption and economic decline.

Moreover, Chinese netizens associate a strong economy with Germany, but weak current politics. Australia is positively perceived with high-quality education and given the lovely nickname “backward” (土澳) due to its large countryside (but obviously, the technology, lifestyle/culture, and economy are forward).

The politics of Greece are seen as exceptionally positive due to the good relationship with China, but the declining economy is perceived as negative together with the country’s incestuous mythology. 

Finally, Italy is positively associated with brands and the economy, but negatively with the country’s politics and xenophobia.

Positive Associations

According to Baidu autocomplete and Baidu PPC data, positive associations are mostly centered around politics, the economy, sports, and studying abroad.

Positive associations: number of keyword results in top 10 Baidu autocomplete and Baidu PPC data insight for 11 major Western countries

Negative Associations

In terms of Baidu autocomplete and Baidu PPC data, negative associations are likewise mostly centered around politics, the economy, and the living conditions of a country.

Overall, Chinese online users have the least negative associations with Canada, Australia, and Germany. On the other hand, most negative associations by Chinese online users are with the US, Spain, and Italy.

Negative associations: number of keyword results in top 10 Baidu autocomplete and Baidu PPC data insight for 11 major Western countries

Summary D: Ctrip Hot Cities

The top 23 cities on Ctrip reveal that the US, France, the UK, and Australia are the most foreign searched destinations online by Chinese netizens in mainland China after major Asian countries with Thailand as their favorite. The Ctrip results can be viewed as an indicator for the Chinese tourism industry.

  • Your Western business: overseas travel agencies targeting Chinese tourists (groups, individuals)
  • China marketing strategies to reach Chinese customers: Baidu SEO + PPC, social media marketing

Summary E: Hashtag Followers for Major Western Countries on Douyin & Xiaohongshu

The countries USA, UK, and Russia have the most streams and videos with respective hashtags on Douyin, as well as notes on Xiaohongshu.

  • Your Western business: overseas travel agencies targeting Chinese tourists (groups, individuals)
  • China marketing strategies to reach Chinese customers: social media marketing

Summary F: Weibo Embassy Followers of Major Western Countries

On Sina Weibo, the embassies of the US, UK, and Canada have the most followers. Since embassies provide visas for studying, working, and relocating abroad, this indicates the most attractive destinations for Chinese to live and work abroad.

  • Your Western business: overseas higher education institutions, immigration service providers, overseas real estate agencies, overseas companies seeking Chinese staff
  • China marketing strategies to reach Chinese customers: social media marketing

Summary G: Taobao Autocomplete Results for Major Western Countries

Searches on Alibaba Group’s Taobao reflect the interest and demand (services, products) of Chinese consumers in mainland China related to different countries. Taobao aggregates the search results from Taobao, Tmall, and Tmall Global

This information is relevant for overseas businesses selling their e-commerce products – especially because Taobao (owned by Alibaba Group) is the largest e-commerce platform worldwide before Amazon.

The autocomplete results in China on Taobao reveal that most Chinese are looking for services related to traveling abroad, Daigou (to order foreign products) and foreign brands, as well as immigration services.

  • Your Western business: overseas travel businesses, immigration service providers, global brands aspiring to sell to Chinese consumers
  • China marketing strategies to reach Chinese customers: social media marketing
services - number of searches on Taobao

In terms of products, most Chinese are searching Taobao for foreign consumer products, which are – by far (!) – fashion and (imported) food. Finally, medical products/supplements and gaming are also searched often.

  • Your Western business: food delicacy and specialty companies, global brands (fashion & accessories, medical & supplements, gaming & toys)
  • China marketing strategies to reach Chinese customers: social media marketing
products - number of searches on Taobao

Summary H: Overseas Chinese Communities

Outside of Asia, the largest Chinese communities can be found in the US, Canada, Australia, and the UK.

Summary I: FDIs, Chinese Exports & Imports

In terms of foreign direct investments (FDIs), China heavily places more than half of its investments in Europe, East Asia, and West Asia in its ongoing process to establish the New Silk Road, securing geopolitical influence and power.

Regarding Chinese exports, the majority (technical equipment, machines, clothes) go abroad, namely to the US (41%) and Hong Kong (24%).

Finally, Chinese imports (crude petroleum, technical items, cars, food) mainly come from Asia, namely Japan (22%) and South Korea (22%).

Summary J: Perception of Products “Made-in-Country”

Products made in Germany, Switzerland, the EU, New Zealand, and Canada are generally associated with good quality, health, and safety in China. 

On the other side of the spectrum are products made in the Philippines, Turkey, Indonesia, Mexico, and Iran, which are perceived as less good.

Outlook – How China Sees the World (Economy, Politics)

In 2022, as the world slowly leaves the Covid-pandemic behind, new global challenges appear. The Chinese real estate market is in crisis, beyond local inflation and rising interest rates, and the invasion of Ukraine by Russia continues.

Besides, worldwide supply chain disruptions and consequent delivery bottlenecks, rising raw material and construction costs affect China with its zero-Covid policy disproportionately.

Finally, a global recession and inflation are on the horizon, and international politics continue to be tense – especially between the US and China, and their ongoing trade war.

Details – How China Sees the World

Now, let’s take a deep dive into how China sees the world.

To begin with, let’s take a look at the autocomplete results on the Baidu search engine as well as the Baidu PPC keyword tool for 11 major Western countries to get a first idea of what Chinese online users associate with other countries when searching the internet. 

国外 (Foreign)

First, the Baidu search engine auto-complete results (screenshot below) plus Baidu PPC data (no screenshot) show that the questions asked about “foreign” are mainly related to accessing information outside of China (e.g. CDN, VPN, server) and studying abroad.

Baidu autocomplete results for foreign
Source: baidu.com (Q4/2022)

Internet outside China (includes businesses that want to conduct business outside of China)

  • Foreign server
  • Foreign website
  • Foreign accelerator (VPN/CDN tool)
  • Foreign search engine
  • Foreign version of Douyin/TikTok
  • Happy sister in America (travel vlogger)

Studying

  • How to apply for foreign graduate students
  • Study abroad
  • Foreign academic degree certification

Dating/Sex

  • Foreign fountain website (wordplay on pornographic sites)

Movies

  • Foreign movies

海外 (Overseas)

Next, the Baidu search engine auto-complete results (screenshot below) plus Baidu PPC data (no screenshot) show that the questions asked about “overseas” are mainly centered around overseas e-commerce/shopping platforms as well as overseas websites, hosting, and more.

Baidu autocomplete results for overseas
Source: baidu.com (Q4/2022)

Foreign e-commerce (B2B)

  • Is the overseas short video cross-border e-commerce platform real?
  • Overseas Daigou
  • Overseas shopping mall
  • Overseas warehouse

Unlike in Western countries, where there are many B2C searches in the e-commerce sector, Chinese online users mainly search for B2B-related e-commerce opportunities.

Internet outside China (includes businesses that want to conduct business outside of China)

  • Foreign server (cloud)
  • Foreign website
  • Overseas accelerator (VPN/CDN tool)
  • How to make money on TikTok overseas

去国外 (Go Abroad)

In terms of “going abroad”, the Baidu search engine auto-complete results (screenshot below) plus Baidu PPC data (no screenshot) mainly focus on studying, working, immigrating, and traveling abroad. More specifically, Chinese netizens are mainly interested in going abroad to the US and the UK.

Baidu autocomplete results for go abroad
Source: baidu.com (Q4/2022)

Studying

  • Requirements for studying abroad for a doctorate
  • What are the requirements for studying abroad
  • How much does it cost to study abroad for a year
  • Study in the UK

Working

  • What to do to work abroad
  • Agent to work abroad
  • Go to work abroad
  • Conditions for becoming a Chinese teacher abroad

Immigration

  • Immigrate to America
  • How to settle in the United States
  • How to apply for a visa to travel abroad
  • How an ordinary person goes to America

Movies

  • Being Julia

去海外 (Go Overseas)

For “going overseas”, the Baidu search engine auto-complete results (screenshot below) plus Baidu PPC data (no screenshot) are centered around immigrating, studying, and working abroad, mainly in the US.

Baidu autocomplete results go overseas
Source: baidu.com (Q4/2022)

Internet outside China (includes businesses that want to conduct business outside of China)

  • Overseas apps

Immigration

  • How an ordinary person goes to America
  • Introduction to buying real estate overseas
  • Is ”going abroad Q&A” a scam? (refers to scammy agencies)
  • How to buy overseas

Studying

  • Study abroad

Working

  • Is it okay to work overseas?

Details B: Keyword Results of Major Western Countries (Baidu Autocomplete, Baidu PPC)

Next, let’s find out what Chinese people in China and around the world associate with different countries. 

Monthly Average Searches on Baidu PPC Keyword Tool

To begin with, we look at which countries are most searched by Chinese netizens according to the Baidu PPC Keyword Tool. 

As you can expect, Russia is the most searched country online in China in Q4/2022, due to the ongoing war in Ukraine, and less out of immigration or other interests.

CountryMonthly Average Searches on Baidu PPC Keyword Tool
Russia1,206,984 
USA546,722
UK398,108
Germany292,041
Australia273,435
Canada263,049
France224,784
Italy207,458
Spain146,524
Greece110,026
Portugal76,843

Now, let’s take a closer look. We will examine the Baidu autocomplete phrases and Baidu PPC data for each of the 11 major Western countries.

USA

The Chinese word for the US “美国” is based on “美” (měi), which sounds similar to the ME in “aMErica”, and means “beautiful”. So, “美国” literally means “the land of the beautiful” or “beautiful land”. 

Chinese internet users mainly search for American movies and dating/sex-related keywords.

Movies

  • American movie
  • American blockbuster soundtrack
  • American Horror Story
  • Captain America

Dating/Sex

  • xxxxUnited States
  • xxixUnited States

Brands

  • Sephora

Internet outside USA

  • Foreign email provider

UK

Next, the Chinese word for the UK “英国” is based on “英” (yīng), which sounds similar to the ENG in “ENGland”, and means “hero”. So, “英国” literally means “land of heroes”. 

Chinese netizens are particularly interested in studying in the UK and immigrating to Britain as well as the British economy.

Studying

  • Top 10 UK universities
  • Cost of studying in the UK for one year
  • UK university rankings

Immigration

  • UK residential
  • UK visa

Economy

  • UK economy

Germany

The Chinese word for Germany “德国” is based on “德” (dé), which sounds similar to DE in “DEutschland” (“Germany” in German), and means “virtue”. So, literally “德国” means “land of virtue”. German products have a very good reputation in China. In the past, German politics was seen as strong and straightforward (especially during the war), and now the country’s economy is perceived as weak.

Chinese people are especially interested in the German economy and brands as well as studying in Germany.

Economy

  • German stock market
  • German GDP
  • German DAX index

Brands

  • German car brands
  • Vaillant

Studying

  • Conditions and fees for studying in Germany

Australia

Next, the Chinese word for Australia “澳洲” is based on “澳”, which sounds similar to the Au in “AUstralia” and means “bay”. 

People in the Middle Kingdom search the most online about studying in and immigrating to Australia. Besides, Chinese netizens search for food specialties, gambling (prohibited in China), and brands.

Studying

  • Study in Australia
  • Eight prestigious universities in Australia
  • Australia 51758 (271 visa for students, 580 visa for parents of students)
  • How much does it cost to study in Australia for a year?
  • Ranking of the top eight universities in Australia
  • Australian university rankings

Immigration

  • The latest conditions for Australian immigration
  • Australian immigration

Dating/Sex

  • Australian Soul download (dating app)

Food

  • Australian lobster

Gambling

  • Australian Lucky 5 (lottery)

Brands

  • Vodafone Australia

Canada

The Chinese word for Canada “加拿大” has been transliterated. Chinese online users are interested in studying in Canada, gambling, immigrating to Canada, and a Canadian winter fashion brand.

Studying

  • Cost of studying in Canada for one year
  • Study in Canada
  • Canadian university

Gambling

  • Canada 28 (lottery)
  • PC Canada 2.8 official website online prediction

Immigration

  • Immigration to Canada

Brands

  • Canada Goose (winter clothes)

Greece

Next, the Chinese word for Greece “希腊” (xīlà), which sounds similar to the HE in “HEllas” (the Greek name for “Greece”) and literally means “rare meat” (maybe because of Souvla?!). So, “希腊” is a pure transliteration for “Greece”.

Internet users in the Middle Kingdom are mainly searching online for immigrating to Greece as well as Greek history and mythology.

Immigration

  • Greece immigration policy 2022
  • House buying immigration in Greece
  • Unique Greek immigration
  • Immigrate to Greece

History/Mythology

  • Ancient Greece
  • Greek mythology
  • Greek mythology characters
  • 12 gods of Greek mythology

France

The Chinese word France “法国” is based on “法”, which sounds similar to the FRA in “FRAnce” and means “law”. So, literally, “法国” means “land of the law” and is likely related to French philosophers like Descartes.

Online users in China are particularly interested in French movies and TV shows.

Movies/TV

  • SKAM French version (TV show)
  • French ethics film

Dating/Sex

  • French Lover

History

  • The French Revolution

Italy

Next, the Chinese word for Italy “意大利” has been transliterated. Online users in the Middle Kingdom especially search for dating/sex, studying in Italy, food specialties, and brands.

Dating/Sex

  • Italian A (adult)
  • French Italian Sex Classic xxxxx
  • xxxx italian sex boutique

Studying

  • How much is the cost of studying in Italy a year

Food

  • Spaghetti

Brands

  • Italian Barazza (kitchen appliances)

Spain

The Chinese word for Spain “西班牙” has been transliterated. Chinese netizens are interested in Spanish movies, studying in Spain, and Spanish delicacies (ham).

Movies

  • Spanish movies
  • Spanish movie recommendations

Studying

  • Study in Spain

Sports

  • Spanish Ligue 1

Food

  • Spanish ham

Portugal

Next, the Chinese word for Portugal “葡萄牙” has been transliterated. 葡萄 means grapes and refers to wine, so 葡萄牙 literally means grape or wine tooth.

Chinese people are especially interested in immigrating to Portugal and sports (soccer).

Immigration

  • Latest policies for Portuguese immigration
  • Portuguese immigration
  • Portugal 88.2 (residence permit)

Sports

  • Portugal football team
  • Portuguese Premier League
  • Portuguese table tennis
  • Portuguese sports

Russia

Finally, the Chinese word for Russia “俄罗斯” is also a transliteration. The Chinese overall particularly search online around dating/sex. Due to the ongoing invasion of Russia in Ukraine, most Chinese online searches are related to this war in Q4/2022 – we are neglecting the search results related to this as it is a temporary data variation.

Internet outside China

  • Russian search engine

Dating/Sex

  • Russian mom online
  • Russian Lolita
  • Russian xxx

Details C: Keyword Results of “Why” + Major Western Countries (Baidu Autocomplete, Baidu PPC)

Now, let’s take a closer look into what Chinese netizens in the Middle Kingdom and around the world associate with various countries.

How China sees the world: “为什么美国” (Why America…)

When searching for “why the US…” on Baidu (screenshot below) as well as Baidu PPC insights, the main results show that the Chinese view America as powerful, and American men have big penises (positive associations). On the other hand, it is also associated with going to war often (negative).

  • Why are American penises so big?
  • Why did the US fight Vietnam?
  • Why did the US attack Iraq?
  • Why is there no bullet train in the US?
  • Why is TSMC controlled by the US? (Taiwanese chip manufacturing company)
  • Why is America so powerful?
  • Why is Area 51 a restricted area?
Baidu autocomplete why America
Source: baidu.com (Q4/2022)

How China sees the world: “为什么英国” (Why England…)

When searching for “why the UK…” on Baidu (screenshot below) as well as Baidu PPC insights, the main results show that the Chinese view England as not afraid of the US and as a country with wide influence (positive association), but decadent, corrupt and always changing their prime ministers (negative association).

  • Why is Britain called a corrupt country?
  • Why is the UK not afraid of the US?
  • Why is the UK always changing its prime ministers?
Baidu autocomplete why England
Source: baidu.com (Q4/2022)

How China sees the world: “为什么德国” (Why Germany…)

When searching for “why Germany…” on Baidu (screenshot below) as well as Baidu PPC insights, the main results show that the Chinese view Germany as economically and politically strong in the past, especially in World War II (positive associations). The top Baidu results show negative associations by the Chinese towards Germany in terms of xenophobia (Jews) and its political representation internationally.

  • Why is Germany still so strong after WW1 and WW2?
  • Why German Autobahns Have No Speed ​​Limits
  • Why is German industry so powerful?
  • Why do Germans hate Jews so much
  • Why was Germany so strong in WWII?
  • Why do German presidents rarely show up?
Baidu autocomplete why Germany
Source: baidu.com (Q4/2022)

How China sees the world: “为什么澳洲” (Why Australia…)

When searching for “why Australia…” on Baidu (screenshot below) as well as Baidu PPC insights, the main results show that the Chinese view Australia as a country with excellent studying and higher education possibilities (very positive) and a high-quality lifestyle (lovingly nicknamed “backward” – see below). On the other hand, there are negative associations around Australia being dangerous (spiders).

Tuao (土澳, tǔ ào) is a humorous slang term that literally means “rural Australia” and refers to the country being “unrefined and backward” in the eyes of Chinese, especially in terms of language (accent), urban design (very close to nature) and mobile payment technology. While this term is widely used, especially by Chinese migrants on WeChat and other Chinese social media platforms, it is more used in an affectionate rather than derogatory way. This is reflected in the strong online search (and therefore interest and demand) of Chinese citizens to study in Australia and migrate there (see above).

Baidu autocomplete why Australia
Source: baidu.com (Q4/2022)

How China sees the world: “为什么加拿大” (Why Canada…)

When searching for “why Canada…” on Baidu (screenshot below) as well as Baidu PPC insights, the main results show that Chinese view Canada as a big country (with few inhabitants) and politically strong as well as a good immigration destination (positive associations).

  • Why don’t Canadian men go home? (WeChat lottery/gambling)
  • Why is Canada not afraid of the US?
  • Why is Canada Goose so expensive?
  • Why does Canada welcome Immigrants?
Baidu autocomplete why Canada
Source: baidu.com (Q4/2022)

How China sees the world: “为什么希腊” (Why Greece…)

When searching for “why Greece…” on Baidu (screenshot below) as well as Baidu PPC insights, the main results show that the Chinese have positive associations with Greece related to Chinese-Greece relations. Negative associations of Greece by the Chinese center around the country’s poverty and bankruptcy as well as mythology (incest, nudity).

  • Why are Greek sculptures nude?
  • Why is Greece friendly to China?
  • Why is Greek mythology so messed up?
  • Why does Greece have good relations with China?
  • Why does Greece always help China?
  • Why is Greece going bankrupt?
Baidu autocomplete why Greece
Source: baidu.com (Q4/2022)

How China sees the world: “为什么法国” (Why France…)

When searching for “why France…” on Baidu (screenshot below) as well as Baidu PPC insights, the main results show that the Chinese have positive associations with France around brands, political strength, romance, and higher education (PhD only 1 year). Negative associations of France by the Chinese are related to French cars and xenophobia.

The derogatory term of the French “frogs” refers to the French eating frogs’ legs as a delicacy as well as the fleur-de-lis, a French symbol of the monarchical period, that is also sometimes referred to as three frogs or toads saluting.

  • Why are there more and more blacks in France?
  • Why are there so many French luxury brands?
  • Why was the French Revolution the most complete revolution?
  • Why are the French called frogs?
  • Why are French cars not selling well in China?
  • Why is France called the China of the West?
Baidu autocomplete why France
Source: baidu.com (Q4/2022)

How China sees the world: “为什么意大利” (Why Italy…)

When searching for “why Italy…” on Baidu (screenshot below) as well as Baidu PPC insights, the main results show that the Chinese positively associate Italy’s good connection to Germany, the country’s luxury cars and brands. On the other hand, the Chinese negatively associate Italy’s weakness in World War II.

  • Why can’t Italians stand pineapple pizza?
  • Why are Italian sports cars so powerful?
  • Why are there so many Italian luxury brands?
  • Why didn’t Italy annex the Vatican?
  • Why does Germany love Italy so much?
  • Why was Italy so weak in WWII?
  • Why is Italian pasta so hard?
Baidu autocomplete why ITaly
Source: baidu.com (Q4/2022)

How China sees the world: “为什么西班牙” (Why Spain…)

When searching for “why Italy…” on Baidu (screenshot below) as well as Baidu PPC insights, the main results show that Chinese positively associate soccer with Spain. On the other hand, Spain is perceived negatively as an (economically and politically) weak country, i.a. because it didn’t annex Portugal.

  • Why are things always so bad in Spain?
  • Why are Spain and Portugal in decline?
  • Why didn’t Spain annex Portugal?
Baidu autocomplete why Spain
Source: baidu.com (Q4/2022)

How China sees the world: “为什么葡萄牙” (Why Portugal…)

When searching for “why Portugal…” on Baidu (screenshot below) as well as Baidu PPC insights, the main results show that Chinese have positive associations with Portugal related to soccer, and negative associations regarding the economy and overall state of the country as well as Golden Visa issues, possibly due to high commissions by agencies and brokers.

  • Why is Portugal so poor?
  • Why don’t the Chinese go to Portugal?
  • Why is the Portuguese national football team so strong?
  • Why are Portuguese names so long?
  • Why are Portugal and Spain not united?
  • Why is Portugal mostly exporting grapes?
Baidu autocomplete results why Portugal
Source: baidu.com (Q4/2022)

How China sees the world: “为什么俄罗斯” (Why Russia…)

When searching for “why Portugal…” on Baidu (screenshot below) as well as Baidu PPC insights, the main results show that the Chinese positively associate natural resources, strong foreign politics, and a high level of education (excellent mathematicians). The search results generally show support by Chinese citizens of Russia’s invasion of Ukraine. On the other hand, negative associations with Russia by the Chinese include xenophobia.

  • Why is Russia called a fighting nation?
  • Why are there no black people in Russia?
  • Why hasn’t Russia taken Ukraine yet?
  • Why doesn’t China help Russia?
  • Why are Russian tsars Germans?
  • Why is Russian mathematics so good?
  • Why are Russian meat products not allowed to be imported?
Baidu autocomplete why Russia
Source: baidu.com (Q4/2022)

Details D: Ctrip Hot Cities

These are the top 11 countries (23 cities) on Ctrip as searched for by Chinese online users. The top 4 Western countries searched for on Ctrip are the US, France, the UK, and Australia.

  1. Korea (Seoul, Jeju City)
  2. Thailand (Bangkok, Phuket, Chiang Mai, Pattaya, Koh Samui, Krabi)
  3. Japan (Tokyo, Osaka, Kyoto, Naha)
  4. Singapore (Singapore)
  5. Indonesia (Bali)
  6. Malaysia (Kota Kinabalu, Kuala Lumpur)
  7. USA (LA, Las Vegas, New York)
  8. France (Paris)
  9. UK (London)
  10. Vietnam (Nha Trang)
  11. Australia (Sydney)
How China sees the world - Ctrip
Source: ctrip.com (Q4/2022)

Details E: Hashtag Followers for Major Western Countries on Douyin & Xiaohongshu

The number of Chinese people following the aforementioned 11 major Western countries on China’s top social media platforms Douyin and Xiaohongshu reveal similar trends. Keep in mind that Russia is experiencing increased search volumes due to the ongoing invasion in the Ukraine.

Douyin

The below list is sorted by the number of streams per hashtag (Q4/2022). On Douyin, hashtags for the US, Russia, Germany, and Australia have the most followers.

CountryDouyin Hashtags (Streams)Douyin Hashtags (Videos)
USA144,370,000,000629,000
Russia125,900,000,0001,617,000
Germany13,400,000,000147,000
Australia11,360,000,000173,000
France10,310,000,000115,000
Italy8,580,000,000180,000
Canada8,060,000,000158,000
UK2,070,000,000243,000
Portugal1,850,000,00044,000
Greece860,000,00030,000

Xiaohongshu

The below list is sorted by the number of notes per hashtag (Q4/2022). On Xiaohongshu, notes for the US, UK, Australia, and Germany have the most followers.

CountryXiaohongshu (notes)
USA4+ million
UK4+ million
Australia4+ million
Germany2+ million
France2+ million
Italy2+ million
Canada1+ million
Russia860,000
Greece543,000 
Portugal110,000

Details F: Weibo Embassy Followers of Major Western Countries

The number of Chinese people following the below countries’ embassy accounts on Sina Weibo as well as the number of streams reveal that the US, UK, and Canada are the most followed embassies. This is relevant as embassies issue work, student, and immigration visas.

The below list is sorted by the number of Weibo followers (Q4/2022).

CountryWeibo Embassy Account FollowerNumber of Streams
USA3,125,000125,000,000
UK1,947,00018,089,000
Canada2,624,00011,081,000
Russia733,00041,451,000
France577,0005,370,000
Australia411,00014,571,000
Germany376,0005,417,000
Italy102,000870,000
Spain77,000525,000
Greece57,000130,000
Portugal40,000Streams not displayed

Details G: Taobao Autocomplete Results for Major Western Countries

The Taobao autocomplete results in China are relevant for overseas businesses selling their CBEC e-commerce products in China on Taobao, which also has Tmall integrated. Contrary to Amazon, consumers can also search for services on Taobao.

USA

Related to the US, Chinese consumers mostly search for brand services and entertainment products.

  • Services: American apple ID, US trademark registration, Daigou in USA, United States travel, US Apple account
  • Products: Captain America, American Golden Tiger Whip (potency pills), The end of America (gaming), The Last of Us Part 1 Remake (gaming), Captain America shield

UK

Related to the UK, Chinese consumers mostly search for fashion goods, as well as travel and online shopping-related services.

  • Services: Daigou in the UK, British tourism
  • Products: UK phone card, British sweatpants, Official genuine British sweatpants, UK adapter plug, British hunting suit, Queen of England, British shorthair cat, British shorthair blue cat

Germany

Related to Germany, Chinese consumers mostly search for branded products (medicinal, hygiene) as well as fashion and games.

  • Services: Germany travel
  • Products: Halli Galli (game), German horse balm, Germany jersey (soccer shirt), Germany imported kitchen supplies, German windbreaker (Crane brand), German Doppelherz (supplements), Razor imported from Germany
  • Other: Voice of Berlin (Germany), German shepherd

Australia

Related to Australia, Chinese consumers mostly search for medical products and supplements as well as specialty food items.

  • Services: Australian Daigou
  • Products: Australia Selsun (medicine), Australian sheep oil, Australian calcium tablets, Australian oatmeal, Australian probiotics, Australian lobster (2x), Australian milk powder, Australian fir (tree)

Canada

Related to Canada, Chinese consumers mostly search for branded products (Canada Goose fashion) as well as food/delicacies, and travel/online shopping-related topics.

  • Services: Canada travel, Canadian Daigou
  • Products: Canada Goose, Canada Goose down jacket, Canada Goose official flagship store, Men’s Canada goose down jacket, Canadian American Ginseng, Canadian ice wine, Women’s Canada goose down jacket, Canada down jacket

Greece

Related to Greece, Chinese consumers mostly search for mythology/history and fashion.

  • Services: Greece travel
  • Products: Greek style dress, Greek yogurt, Greek goddess dress, Greek mythology (2x)

France

Related to France, Chinese consumers mostly search for fashion and accessory brands as well as cosmetics.

  • Services: France travel
  • Products: Embryolisse moisturizer, French designer bags, Lacoste, French trench coat, Le Coq Sportif sneakers, Embryolisse makeup primer, French Lancome skincare set, French tutu skirt, French imported red wine

Italy

Related to Italy, Chinese consumers mostly search for food specialties and fashion as well as travel services.

  • Services: Italy travel, Atos (Italy)
  • Products: Spaghetti, Pasta sauce, Spaghetti bolognese, Italian luxury men’s shoes, Italian dress, Italian glass paperweight, Italy jersey (soccer shirt), Italian top

Spain

Related to Spain, Chinese consumers mostly search for fashion and food specialties.

  • Services: Spain tourism, Spanish (learning)
  • Products: Spanish ham, Spanish designer shoes, Spain jersey (soccer shirt), Spanish red wine, Spanish Curarti (pain relief products)

Portugal

Related to Portugal, Chinese consumers mostly search for immigration and sports apparel.

  • Services: The latest policy of Portuguese immigration, Portuguese immigrants, Portugal 882 Immigration Act, Portuguese translation, Portuguese English (translation)
  • Products: Portugal jersey (soccer shirt), Portugal World Cup lineup 2022 (soccer apparel), Portugal national team (soccer apparel)
  • Other: Portuguese capital, Portugal time, Area of ​​Portugal

Russia

Related to Russia, Chinese consumers mostly search for food and supplements as well as gaming items.

  • Services: Russian tourism
  • Products: Russian milk powder, Russian chocolate, Russian bran balls, Tetris game, Imported milk powder from Russia, Official flagship store of imported food from Russia, Matryoshka dolls

Example Screenshot Taobao autocomplete search for “俄罗斯” (Russia)

Example Screenshot Taobao autocomplete search for “俄罗斯” (Russia)
Source: taobao.com (Q4/2022)

Details H: Overseas Chinese Communities

These are the countries with the most Chinese expats (2020)

CountryChinese expats
Thailand7 million
USA5.4 million
Singapore3 million
Canada1.9 million
Australia1.4 million
United Kingdom500.000
Spain300.000
New Zealand300.000
Greece130.000
Germany150.000
Portugal25.000
Turkey19.000
Cyprus1.000
Malta600

With proximity and a similar lifestyle, Thailand is a favorite among overseas Chinese. Besides, the US and UK are favored by the Chinese, in particular for young adults who study abroad. Good to know: Many Chinese families buy their children who study abroad an apartment to live in – which later becomes an investment property.

Details I: FDIs, Chinese Exports & Imports

Now, let’s take a look at foreign direct investments, as well as the main Chinese export and import destinations.

Foreign Direct Investments

The total Chinese investments between 2005 and mid-2022 by global region shows that China mainly invests in Europe, East Asia, and Africa to expand its geopolitical influence through the New Silk Road initiative.

RegionBillion USDIn percent
Europe454.422%
East Asia329.716%
West Asia325.116%
Sub-Sahara Africa311.915%
Arab Middle East & North Africa223.711%
United States194.710%
Australia124.36%
North America (excl. USA)77.34%
Total2,041.1100%

Chinese Exports by Country

In 2020, the items with the highest export from China into the world were broadcasting equipment, computers, integrated circuits, office machine parts, and clothing. 

China mostly exported to

  • USA (438 billion USD)
  • Hong Kong (262 billion USD)
  • Japan (151 billion USD)
  • Germany (112 billion USD)
  • South Korea (110 billion USD)

Now, let’s take a look at the imports into the Middle Kingdom.

Chinese Imports by Country

The top items imported to China in 2020 were crude petroleum, integrated circuits, iron ore, cars, and soybeans.

China mostly imported from

  • Japan (133 billion USD)
  • South Korea (131 billion USD)
  • USA (122 billion USD)
  • Germany (106 billion USD)
  • Taiwan (104 billion USD)

Details J: Perception of Products “Made-in-Country”

This 2017-statistic shows that products made in Germany, Switzerland, the EU, New Zealand, and Canada are mostly associated with “very positive”. 

On the other hand, products made in the Philippines, Turkey, Indonesia, Mexico, and Iran evoke negative associations.

This brings us to the end of this article on how China sees the world.

How China Sees the World – The Takeaway

We have analyzed in depth the Baidu autocomplete results and Baidu PPC data related to 11 major Western countries: the US, UK, Germany, Australia, Canada, Greece, France, Italy, Spain, Portugal, and Russia. These are the main findings:

  • The main keywords around overseas (foreign, overseas, go abroad, go overseas) largely revolve around accessing information outside of China, foreign e-commerce/B2B, studying, and working abroad/immigration.
  • The main keywords Chinese netizens search for in relation to the aforementioned countries are centered around studying, migrating, movies/TV, dating/sex, and sports.
  • When searching for “Why” + the respective Western country, the main positive associations are related to politics, the economy, sports, and studying abroad (best 3 = Canada, Greece, France), while the negative associations are related to politics, the economy, and xenophobia (last 3 = Italy, Spain, US).

Further findings from key social and e-commerce platforms in China:

  • According to Ctrip hot cities, the US, France, the UK, and Australia are the most searched foreign destinations by Chinese online users after Asian countries. This can be viewed as an indicator of destinations that the Chinese like to travel.
  • In terms of hashtag followers on Douyin and Xiaohongshu, the US, UK, Germany, and Australia have the most streams and videos on these leading Chinese social media platforms.
  • On Sina Weibo, the embassies of the US, UK, and Canada have the most followers. This is relevant for studying and working abroad as well as immigration as embassies issue visas.
  • The Taobao (Alibaba Group) autocomplete results reflect the interest and demand (services, products) of Chinese consumers in mainland China related to different Western countries. This information is relevant for overseas businesses selling their e-commerce products. The most foreign sought-after services are related to traveling abroad, Daigou (to buy foreign products), brands, and immigration services. The most sought-after products are related to foreign consumer products: fashion and (imported) food as well as medical products/supplements.

Additional findings (political, economic) related to Chinese in China and around the world:

  • Outside of Asia, the largest Chinese communities are in the US, Canada, Australia, and the UK.
  • The Chinese Government conducts foreign direct investments (FDIs) mainly in Europe, East Asia, and West Asia to secure geopolitical influence, i.a. by expanding trade routes along the New Silk Road.
  • China mainly exports to the US and Hong Kong, while importing mainly from Japan and South Korea.
  • Products made in Germany, Switzerland, the EU, New Zealand, and Canada are associated with the best quality, health, and safety.

Overall, the Baidu autocomplete search results as well as the Baidu PPC data insight reveal that Chinese online users are mostly interested in overseas immigration, tourism, higher education, and brands as well as accessing the internet outside China (including Chinese companies who are in need of marketing services outside China). Besides, we also examined data from relevant Chinese social media and e-commerce platforms as well as further economic and politically relevant data.

Therefore, the following overseas businesses (services and products) have a high potential in the Middle Kingdom:

  • overseas higher education providers (universities, colleges)
  • immigration agencies and service providers
  • overseas real estate agencies
  • overseas travel companies
  • Digital marketing agencies that can help Chinese companies expand outside China
  • international companies seeking Chinese employees
  • global food delicacy and specialty companies seeking to import to China
  • international brands aspiring to sell to Chinese consumers: fashion & accessory, medical & supplements, gaming & toys

China marketing solutions to reach a large, ready-to-buy audience (brand-driven) in China:

  • localized Chinese website 
  • Baidu SEO (organic results)
  • Baidu PPC (paid results)
  • Chinese social media brand account (focus on Weibo, Douyin, Xiaohongshu) 
  • business account on WeChat (for communication)
  • partnerships with influencers and agencies/agents
  • co-branding

So, this is how China sees the world.

how China sees the world - Tenba Group

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Attention Overseas Universities: How to Reach Chinese Students https://tenbagroup.com/attention-overseas-universities-how-to-reach-chinese-students/ Thu, 27 Oct 2022 14:48:14 +0000 https://tenbagroup.com/?p=25059 Chinese students typically are perceived as hardworking and wealthy. With the “China dream” and the country’s “common prosperity” ambition, quality education is gaining relevance quickly.  Particularly, wealthy families increasingly send their children to overseas universities and higher education institutions in search of the best education as well as reputable degrees, the opportunity to gain life …

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Chinese students typically are perceived as hardworking and wealthy. With the “China dream” and the country’s “common prosperity” ambition, quality education is gaining relevance quickly. 

Particularly, wealthy families increasingly send their children to overseas universities and higher education institutions in search of the best education as well as reputable degrees, the opportunity to gain life experience abroad, to form connections with other ambitious students, and create a lifetime Guanxi network.

Do you represent an international secondary education institution, offering Bachelor’s and Master’s degrees as well as Ph.D. programs, and would like to reach and enroll more Chinese students?

Take a deep dive into the secondary education market and Chinese university students abroad with Tenba Group in this article.

The Global Secondary Education Market

Having a good education is one pillar to create a stable and prosperous life. Normally, the better the education, the better (and higher paid) the job prospects. 

The global education market is growing steadily and is estimated to exceed 10 trillion USD by 2030. Overall, more than 600 million students are enrolled in secondary education worldwide and over 220 million students are enrolled in tertiary education globally these days

In China, about 91 million students are enrolled in secondary education, and around 52 million students have enrolled in post-secondary education. 

In terms of studying abroad, approximately 700,000 Chinese choose to obtain higher education outside of their home country. These students typically come from well-off families who also provide them with ample spending money. 

Wouldn’t it be great to be able to attract them to study at your higher education institution abroad?

Chinese Students Abroad & At Home

Now, let’s take a look at how many Chinese study at home and abroad, and what their favorite subjects are.

Chinese Students at Home

In comparison, the number of undergraduates from public colleges and universities in China reached a record high of around eight million students in 2020. This corresponds to an average increase of 3% in the last few years. 

Around half the students earned a Bachelor’s degree, while the other half earned a more practically oriented short-cycle degree. Almost 730,000 Master’s and Doctor’s degree students graduated from public colleges and universities in China in 2020.

Chinese Education System

In China, secondary education has two routes: academic secondary education (six years) and specialized secondary education (two-four years). The system includes Bachelor, Master, and Doctoral degrees, and is also open to foreign students. Among the most popular universities in China are Peking University, Tsinghua University, and Fudan University. Admission to higher education in China requires taking the National Higher Education Entrance Exam (Gao Kao). 

Due to China’s large population, the number of applicants outweighs the spots at China’s 2,000 universities and colleges. This is one of the reasons why some Chinese students go abroad for their higher education.

The Chinese Ministry of Education underlines the role of higher education in China as a significant part in economic growth, scientific progress, and social development.

Favored Majors

Recently, the most favored majors among Chinese Bachelor students and short-cycle degree students are in the areas of finance, civil, engineering, international trade, economics, accounting, medicine, law, and English language. 

The graduate employment rate is generally stable in China (more than 90%) over the past years on average. Engineering, technology, IT, and science majors are evergreens with very good employment chances and typically a high salary. 

Graduates that struggle to find a job usually graduated from less technical majors and also lack soft skills like communication and critical thinking.

While the average monthly salary of a university graduate in China has increased by more than 120% in recent years, the rising living costs in tier one cities like Beijing or Shanghai often force young graduates to return to their hometowns or seek employment in second and third tier cities. 

Chinese Study Abroad

The number of Chinese students going abroad for their university studies keeps increasing since 2010 – on average by 6% YoY. According to the latest Chinese student study abroad statistics, more than 700,000 Chinese students leave their home country every year to pursue higher education abroad.

This makes China the largest country of origin for international students worldwide. While these numbers have temporarily dipped during the Covid-pandemic, recovery has already begun.

In 2022, the US (~340,000) and the UK (120,000) are the preferred destinations for Chinese students and their parents. In Australia, there are around 155,000 Chinese students, 75,000 in Canada, and 90,000 in Japan. Other popular studying abroad destinations among Chinese students include Korea, Hong Kong, Germany, France, and Macao.

Now, you may ask yourself, why do so many Chinese students study abroad? There are a variety of reasons: 

  • tuition fees abroad may be more affordable – including housing
  • foreign universities are often reputable and internationally acclaimed
  • studying abroad is a “fancy status symbol” in Chinese society, especially for parents
  • gaining experience living in another country – without parents and family – and broadening their horizon
  • forming international connections with peers
  • improving English skills – often limited in mainland China
  • fostering creativity and critical thinking as Chinese schools and universities typically focus on repetition and memorizing
  • expanding cultural (business) interaction skills
  • gain “soft skills” like interpersonal and communication skills in addition to “hard skills”
  • travel the world and explore overseas destinations
  • the apartment that Chinese parents normally buy for their children when studying abroad becomes an investment property after they complete their studies

All this typically results in better employment opportunities for Chinese students who study abroad in the tight Chinese job market. Chinese graduates from foreign universities often return to their home country, to be closer to their families and because of the vast cultural differences.

Typical Requirements for Chinese Overseas Students

The process is typically straightforward. Students need a valid passport, recent photographs, and potentially further supporting documents like proof of university enrollment. They need to fill out the application form and submit it together with the fee, potentially undergo an interview and…wait.

As a representative of an international higher education institution, make sure to show your prospective Chinese students that this process is easy and straightforward, and provide assistance where you can.

  • UK: Tier 4 (General) student visa, 363 GBP application fee, processing time typically is 21 working days
  • USA: F-1 visa is most common, 160 USD application fee, processing time can take up to 6-8 months
  • Canada: Student permit, approx. 150 CAD application fee, processing time can take up to 90 days
  • Australia: Student visa (subclass 500), 650 AUD application fee, processing time can take 30-80 days
  • Japan: Student visa, 3,000 JPY application fee, processing time typically 5 working days

Scholarships for Chinese Students

Chinese students may be eligible for a variety of scholarships. Make sure to show your students how to obtain them:

Baidu Baijiahao & Baidu Baike

In this high-ranking Baijiahao article for liuxue on Baidu, the top destinations for studying abroad are the US, the UK, Australia, Japan, and Canada. Baijahao is Baidu’s content creation platform.

Baidu Baijaho offers a variety of services like forums, news aggregation, and much more. Users can upload videos, articles, and images that can be monetized.

Likewise, the top countries for Chinese students to study in, according to Baidu Baike, the Chinese “Wikipedia” are the same as on Baidu Baijahao: the US, the UK, Australia, Japan, and Canada.

What’s noteworthy is that the US is losing attractiveness to Chinese students in favor of the UK due to the overall political situation.

Baidu Index

Next, Baidu Index is a powerful tool to anticipate trends from online users in China, based on search volume data. For “留学” (study abroad) the index (not the actual search volume) remained stagnant between 2019-2021. 

As the world has been overcoming the aftermath of the Covid-pandemic, the index for studying abroad has been rising since 2022.

The average daily index (median since the year 2011) is about 4,400 (2,500 desktop + 1,900 mobile) for “留学” (study abroad) and the monthly index is around 132,000 with the actual monthly search volume being almost 59,000 according to the Baidu Keyword Planner tool.

Baidu Index search for “留学” (study abroad)
Source: index.baidu.com (Q4/2022)

In terms of demographics, Baidu Index reveals that search queries for “留学” (study abroad) mostly came from Guangdong province ever since the data was recorded in 2013. Next are Beijing, Zhejiang, Jiangsu, and Shandong provinces.

Baidu Index search queries for “留学” (study abroad) according to provinces
Source: index.baidu.com (Q4/2022)

In the screenshot below you can see the provinces where users searched for “留学” in the last 90 days (3 months).

Guangdong province still ranks first as it is a very large and populous province. But Beijing takes rank eight – possibly due to its political setting fewer people strive to go abroad. Zhejiang ranks fifth and Henan ranks fourth in this timeframe.

Baidu Index search queries for “留学” (study abroad) according to provinces
Source: index.baidu.com (Q4/2022)

Besides, most search queries for “留学” (study abroad) come from the age groups 20-29 and 30-39 (left side) and slightly more search queries are made by men (right side). Keep in mind that Baidu Index only displays the demographic data of the previous month.

search queries for “留学” (study abroad)  according to age and gender
Source: index.baidu.com (Q4/2022)

For the topic of education, the main related search categories are as follows. Make sure to address these topics when targeting Chinese students.

  1. education
  2. audio/video: background information on studied topics
  3. information/news: background information on studied topics
  4. health: insurance and medical care when studying (abroad)
  5. reading/learning/books: background information on studied topics
  6. software/apps: software for learning, Chinese apps like WeChat to connect with fellow (Chinese) students
  7. food/drinks: relevant for campus life
  8. finance: tuition financing, but also the local real estate market as many wealthy Chinese buy apartments near campus for the children when studying abroad
  9. travel: making the most out of studying at a destination away from home
  10. leisure/hobbies
education: main related search categories
Source: index.baidu.com (Q4/2022)

Finally, the autocomplete function on Baidu reveals the most common search terms related to “留学” (study abroad). Most of these terms refer to Chinese study-abroad agencies, which underlines the importance of entering partnerships with agencies when targeting Chinese students at an international university.

The UK is the only country that comes up as a result of the search query “留学” (study abroad). Therefore, it can be concluded that it is most relevant for Chinese students seeking international higher education. Besides, the job prospects for students after completing their international studies are highly relevant to them.

The first four results are agencies or agents. This underlines the importance of gaining agents and agencies as partners to enroll Chinese students in international secondary and tertiary education programs.

  • 留学咨询: Education consulting (agent)
  • 留学中介: Study abroad agency (agent)
  • 留学机构哪家最好: Which is the best study abroad agency (agent)
  • 留学中介十大排名: Top ten study abroad intermediaries (agent)
  • 留学申请: Study abroad application
  • 留学生免税车: Tax-free car for international students
  • 留学需要具备哪些条件: What are the requirements for studying abroad?
  • 留学英国: Study in the UK
  • 留学生回国如何找工作: How to find a job when an international student returns home
  • 留学去哪个国家好: Which country is best to study in?
autocomplete function on Baidu for Chinese students
Source: baidu.com (Q4/2022)

How to Market to Chinese Students (And Parents)

Reaching Chinese students – and even more importantly in Chinese culture, their parents and family as the decision-making body and financer – is a straightforward process, if you understand the Chinese culture and its digital trends.

Here’s your step-by-step guide for digital marketing of higher education institutions (public, private) to generate leads among Chinese students:

1. Chinese Social Platforms

To begin with, there are countless Chinese social media apps, some evergreens, and new ones popping up like mushrooms. When selecting the right social media platforms to promote your secondary education institution, it’s wise to keep in mind who you are targeting. Therefore, we’ve divided Chinese social media into two categories: targeting Chinese parents, and Chinese students.

Chinese Parents

As China’s most popular app WeChat is maturing, it is predestined to reach parents as decision-makers for their children’s education. Older online users (parents) tend to read longer and more informational content on WeChat.

Your higher education institution can

  • create a WeChat brand account: to generate organic traffic
  • run PPC ads on your WeChat brand account: to generate paid traffic (if you have an additional budget)

Your university can mainly use the WeChat account to communicate with potential students, agents, and so on. Using a WeChat CRM tool (Customer Relationship Management) makes it easy to manage student leads and sales on this platform. Besides, you can link to your WeChat account from your Chinese website.

Chinese Students

While the Chinese youth also uses WeChat, they are more drawn to trendier platforms like Douyin, Xiaohongshu, and Weibo.

Register official brand accounts on these platforms to generate organic traffic, run PPC ads for paid traffic, and collaborate with Chinese KOL/KOC influencers who are close to your university to reach students in the Middle Kingdom. You can find influencers by following hashtags around studying abroad.

Example: International University on Douyin

This is the official account of the University of Liverpool on Douyin, showcasing student interviews and shorts, answering questions in both Chinese as well as the English language with Chinese subtitles.

With 9,916 followers and 36,000 likes, the University of Liverpool has a good reach on Douyin.

example: University of Liverpool on Douyin
Source: Douyin app (Q4/2022)
Example: Douyin Hashtags

Use popular studying abroad hashtags like the ones below to boost your posts.

Hashtag (Chinese)Hashtag (English)Streams/video viewsNumber of Videos/posts
留学Study abroad (simplified Chinese)17,250,000,000586,000
留學Study abroad (traditional Chinese)300,000,0004,582
留学日常Daily study abroad5,440,000,000243,000
留学留学Study abroad130,000,0001,845
英国留学Study in the UK3,200,000,000163,000
留学生活Study abroad life2,570,000,000110,000
韩国留学Study in Korea2,970,000,00076,000
popular studying abroad hashtags on Douyin
Source: Douyin app (Q4/2022)
Example: KOL Influencer on Douyin

This influencer, liusanjie767, has 130,000 followers. Foreign universities can invite Chinese influencers to their campus to gain authentic reach in the Middle Kingdom. Besides, these influencers can serve as ambassadors resp. contact point for students. An influencer with a large reach who has graduated from that university and knows the faculty would be the perfect match.

You can find influencers who are specialized in the topic of “study abroad” by searching for “留学” in people’s account names or searching for the hashtag “留学” and displaying related personal accounts. This way, you can find out which individuals continuously post about the topic, have a large reach, and are authentic.

Douyin education influencer example
Source: Douyin app (Q4/2022)
Example: International University on Xiaohongshu

This is the official account of the University of York on Xiaohongshu – China’s “Instagram”. 

In fact, Xiaohongshu has become one of the most important platforms in China, especially for the travel/education/real estate industry. That’s because Weibo as the Chinese Twitter is struggling with a large amount of bots/fake accounts, and Douyin may be too general. Xiaohongshu has always been interesting for the travel and cosmetics/beauty industry and has now emerged as a top platform.

Example: International University on Xiaohongshu
Source: Xiaohongshu app (Q4/2022)
Example: Xiaohongshu Notes

On Xiaohongshu, “留学” (study abroad) has 6 million notes, created by its users, which aim to recommend a product or service. On the other hand, “留学” (study abroad) has 586,000 posts on Douyin.

Xiaohongshu notes
Source: Xiaohongshu app (Q4/2022)

2. Agents

Search for study abroad agents on Baidu, WeChat, and other Chinese social media. 

You can search for “留学机构” (study abroad agency) or “留学中介” (study abroad agent). They will typically speak English and work commission-based, and the best way to contact them is through WeChat.

3. Partnerships with Chinese Universities

Identify Chinese universities that offer similar classes, modules, and diplomas to your university. Contact them to start discussing a partnership and student exchange program. It might be easier to start with Chinese universities that have existing partnerships and are therefore familiar with the process and speak English.

4. Chinese-Focused Website

Translate your university website content into Chinese language, adhere to cultural specialties, and answer questions that may be of specific interest to Chinese students and their parents.

Make sure to specifically mention the environment (city, country), everyday life on and off campus, student associations, food and travel options, student work opportunities, how to get a visa, enrollment fees, and contact to the nearest Chinese embassy. 

Social media can give an overview and invite people to find out more, and your website should provide detailed in-depth information.

Keep in mind that you should be hosting your website in China, which is recommended for SEO and loading time purposes. Alternatively, you can host your Chinese website outside of mainland China, but geographically close, with high speed and cloud hosting to get through the Great Firewall of China

5. SEO & PPC for Baidu

China’s most popular search engine Baidu (Google is blocked in mainland China) helps Chinese students and their parents to specifically search for educational information worldwide and inform themselves to make an educated decision.

Optimizing your international website for China’s top search engine Baidu (SEO) will boost your organic search results. At the same time, you can run paid PPC ads on Baidu.

Here is an example Baidu ad of the study abroad agency “Manbosi”.

example Baidu ad of the study abroad agency “Manbosi”
Source: baidu.com

Baidu PPC Data

Optimize your Chinese website for these Baidu top-volume keywords related to “留学” (study abroad) and data from the Baidu PPC Keyword Tool, and consider running ads for them.

Chinese KeywordEnglish KeywordMonthly search volume
出国留学找机构looking for a study abroad agency178,689
高中生留学study abroad as a high school student68,597
出国留学study abroad63,519
专科去留学college to study abroad62,923
留学study abroad58,667
出国留学的条件和要求conditions and requirements for studying abroad31,179
广州留学机构Guangzhou study abroad agency12,722
出国留学费用study abroad fees10,705
出国留学机构study abroad agency8,577
去英国留学一年的费用是多少how much does it cost for 1 year to study in the UK8,251
留学机构咨询study abroad agency consulting7,578
美国本科留学undergraduate study in the United States7,492
金吉列留学Jinjilie study abroad7,142
Source: Baidu PPC Keyword Tool (Q4/2022)

The data above reveals that 

  1. agencies are searched the most
  2. most searches are from Guangdong (Guangzhou) – in line with the Baidu Index in the previous section
  3. the UK is the most popular country for studying abroad, the USA the second-most popular
  4. Jinjilie study abroad agency has the most reach on Baidu 
  5. transparent fees are important to have on a university website targeting Chinese students

Baidu Tieba & Zhihu

Besides, Baidu Tieba, a Chinese online forum managed by an online community, has this board on studying abroad with 750,000 followers as of Q4/2022. 

Overseas universities can use this forum to promote their curriculums and answer questions. The same is true for Baidu’s Q&A Zhihu, which is similar to Quora.

Baidu Tieba and Baidu Zhihu rank well on the Baidu search engine, and therefore entries in these forums help to boost the SEO of your Chinese website though high-value backlinks.

searching for “留学” (study abroad) on Baidu Tieba
Source: tieba.baidu.com (Q4/2022)

6. Online PR

Increase the reach of your international university in the Middle Kingdom, and generate more leads and inquiries on your Chinese website and social media by running PR articles in online and print media like blogs and newspapers (e.g. ifeng, sohu). This also generates valuable backlinks which in turn boosts the SEO of your Chinese website. Furthermore, you can also consider running free webinars on relevant topics.

For more information and services around higher education marketing to Chinese students get in touch with the China experts at Tenba Group.

Case Study: Marketing for Universities

To give you an example of how the above information can look in practice, we’re taking a look at Coventry University in the UK.

Chinese website

This is the Chinese website of Coventry University which even has a student office in Beijing that is managed locally.

Coventry website (example) to attract Chinese students
Source: coventryuniversity.cn (Q4/2022)

Coventry University’s website is hosted in China with an ICP license. It has links to Weibo, WeChat, Xiaohongshu, and Bilibili (a video hosting platform like YouTube). Baidu Tongji is integrated into the site for analytics.

To further improve its online presence, Coventry University could integrate a live chat function and remove the connection to the server ajax.googleapis.com as this domain is blocked and therefore slows down the Chinese Coventry University website.

Chinese Social Media

As you can see on the screenshots below and comparing the latest posts, Douyin generates the most likes and WeChat the least. However, WeChat is particularly important to reach parents who prefer to read longer in-depth articles and posts. Besides, WeChat serves as the main communication tool in China, for universities, prospective students, and their parents.

Coventry University has had its WeChat account since May 2020, its Douyin account since 2020, and its Xiaohongshu account since July 2022. However, it seems that Coventry University stopped posting content on its Douyin account in 2021, and is focusing on Xiaohongshu platform now. They focus their content on food, graduate stories (e.g. how the classes and teacher are, what to do after obtaining the degree), and lifestyle topics. 

Besides, Coventry University’s content also shows foreigners speaking Chinese to create an inviting atmosphere. The message is that it’s easy to find friends at Coventry University, which is important for foreign students, and Chinese in particular, to find other Chinese and international friends.

Coventry presence on Chinese social media
Source: WeChat (app), Xiaohongshu (app), Douyin (app)

In fact, Xiaohongshu is ideal to promote the education industry as it is a fast-growing and trending platform in the Middle Kingdom. The platform has the most posts for studying abroad, and, therefore, an interested target audience as well as many education influencers. Studying abroad goes hand in hand with traveling, another focus topic of Xiaohongshu. In comparison, Weibo is gradually losing relevance in China unless it can get a handle on the issue of fake accounts and bots. 

On Douyin, more and more professional content can be seen (professionally edited videos), while Xiaohongshu remains more casual and videos are recorded in the moment with little post production.

This brings us to the end of this article on Chinese students abroad obtaining higher education as well as marketing strategies for universities to reach these students and their parents.

Chinese Students – The Takeaway

You have now gained insight into the secondary education market worldwide and the preference of Chinese students abroad. We’ve revealed the best strategies for social media marketing for universities, search engine optimization tactics, and more.

Marketing strategies for higher education institutions to engage Chinese students and their parents include

  1. being active on Chinese social media (focus on Xiaohongshu, WeChat for communication)
  2. collaborating with agencies and agents
  3. entering partnerships with Chinese universities
  4. creating a Chinese-focused website (detailed, transparent information like fees)
  5. optimizing your website for Baidu & running PPC ads
  6. run online PR campaigns

So, what’s next?

how to reach Chinese students

Are you ready to attract and enroll Chinese students for the Bachelor, Master, and Ph.D. programs in your international higher education institution? The China experts at Tenba Group help you to get started. Redeem your free consultation!

The post Attention Overseas Universities: How to Reach Chinese Students appeared first on Tenba Group.

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Co-branding in China – Reach Chinese Consumers Synergistically https://tenbagroup.com/co-branding-in-china/ Tue, 27 Sep 2022 12:28:49 +0000 https://tenbagroup.com/?p=25031 Co-branding in China is an exciting opportunity for businesses to create synergies that go beyond the simple addition of two brands. Cross-brand collaborations bring fresh, creative, and exciting co-branded products and services to Chinese consumers. Find out how to grow your client base and raise brand awareness, tap into new markets, increase your sales and …

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Co-branding in China is an exciting opportunity for businesses to create synergies that go beyond the simple addition of two brands. Cross-brand collaborations bring fresh, creative, and exciting co-branded products and services to Chinese consumers.

Find out how to grow your client base and raise brand awareness, tap into new markets, increase your sales and revenue, and much more with the China experts Tenba Group.

The Chinese Market

With the Chinese GDP predicted to reach almost 30 trillion USD by 2027, the Chinese economy is a high-potential market for local and international businesses alike. All of this while dealing with the aftermath of the Covid-pandemic, rising energy costs, political and economic hardships, and global supply chain disruptions. 

China’s transition from a low-cost producer to a consumer-led economy is resulting in increased household income and domestic spending. Young Chinese, in particular, love to shop online. 

So, how to lift the potential of this booming but also super-competitive and saturated Chinese market? Chinese marketing continuously evolves and requires new and innovative marketing strategies to continue to excite Chinese consumers.

One trending and smart marketing strategy is co-branding. This strategy is particularly interesting at present (end of the year 2022) where many companies are cutting marketing budgets due to the generally challenging economic situation post-Covid worldwide: inflation, an imminent recession, the energy crisis, and war in Ukraine.

Co-branding has the potential to create mutual benefits at shared marketing costs as long as it is ensured that all parties of the partnership contribute something to add value, e.g. funds, market knowledge, and/or reach. 

So, let’s take a closer look at everything that is behind this and how to get started in the Chinese market with your international brand.

What is Co-branding?

To begin with, co-branding is a marketing strategy where two (or more) brands, celebrities, or other entities collaborate to jointly promote an existing product/service or create a new one. This strategic alliance is also known as brand partnership. 

Besides, Co-branding can also be the result of a company merger or acquisition as a way to transfer a brand to a better-known or more reputable company.

Finally, co-branding may also include sharing technologies and expertise of each brand partner. In other words, co-branding goes beyond a typical collaboration or synergetic marketing efforts as a new product or service is created with its own branding (look & feel).

Examples of Western Co-branding

Nike x Apple

A well-known example of co-branding is sports brand Nike and tech company Apple. In 2016, Apple and Nike created and promoted the Apple Watch Nike+.

Co-Branding Apple x Nike
Source: apple.com

Burger King x McDonalds 

Another example showing that even competitors can join forces is Burger King and McDonalds. In 2019, they collaborated to raise money for childhood cancer in Argentina.

Proceeds from McDonald’s Big Mac sales for one day were contributed to this charity cause. Burger King did not sell their Whoppers (Big Mac equivalent) on that day and encouraged purchases of McDonald’s Big Mac.

co-branding example (Burger King x McDonalds) - charity
Source: campaignsoftheworld.com

And again, during the Covid-pandemic in 2020, when keeping employees and business going was the focus, these fast-food chains collaborated by encouraging their customers to also purchase from other fast food places.

co-branding example (Burger King x McDonalds) - Covid
Source: Burger King UK’s Twitter

Who is Co-branding for?

Generally, co-branding is a suitable tactic for all brands – small, medium, and large – that wish to 

  • expand their customer base, awareness, and loyalty
  • tap into new markets/niches or expand market reach/share
  • increase revenue streams and profitability
  • boost brand image and value
  • save marketing costs 

Regardless of whether your business is in retail, service, manufacturing, or other – co-branding has the power to create impressive synergies by leveraging the individual USPs of each brand.

Types of Co-branding

Co-branding is typically divided into product-based and communications-based co-branding:

Product-based Co-branding

Linking multiple brands from different companies to market an existing or new product/service, naturally, referred to as product-based co-branding marketing strategy. 

There are two main strategies:

  • Parallel co-branding: multiple brands create a combined brand
  • Ingredient co-branding: ingredients or components from one brand are used in another brand for enhanced reputation and positioning; usually occurs between larger well-known brands

Communications-based Co-branding

Linking multiple brands from different companies to jointly communicate and promote their brands is known as communications-based co-branding.

  • Same-company co-branding: advertising multiple in-house brands through a single product, e.g. Courtyard by Marriott hotels
  • National to local co-branding: small local businesses partner with nationally known brands to increase national brand awareness while increasing small business revenue, e.g. credit card collaboration with local retailers, or vehicle manufacturers partner with local car dealerships
  • Joint venture/composite co-branding: partnership between well-known companies to present a new or existing product or service that couldn’t exist individually, e.g. streaming services partnering with film studios to create/host movies/TV shows
  • Multiple sponsor co-branding: companies partnering up to share technology and promotional events like athletic events and concerts to increase sales, brand recognition, and reputation, e.g. multiple credit card partnerships

Advantages of Co-branding

Co-branding has a large number of potential benefits.

  • Access new target audiences, including new customer demographics (increase reach)
  • Increased sales
  • Establish credibility, expand brand awareness
  • Brand revitalization and positive charging
  • Adds value and differentiation
  • Smaller brands can benefit from more prominent co-branding partners
  • Strengthens brand positioning
  • Resources and advertising costs can be (partly) shared, and risks minimized

Next, let’s take a look at the potential downside.

Limitations of Co-branding

The possible risks of co-branding include:

  • Individual company mission and vision must align to avoid incredibility and unsettle consumers
    • advice: identify brand partners with deep synergistic opportunities and similar core values
  • Keep in mind that brand values typically pass over to each other through co-branding; carefully consider if you want your ideal target audience to associate your brand with the other brand(s) traits
    • advice: choose brand partners who are leaders in their niche
  • Marketing strategies must be aligned with the brand partner, which can lead to less direct influence and control
    • advice: retain full approval and refusal rights for all communications
  • Larger brands may not experience a strong pull from smaller co-brands but may have other benefits like access to a particular niche
    • advice: clearly define the goals and objectives of the collaboration and communicate them transparently with your brand partner to create a “win-win” situation
  • Reach may be more niche targeted compared to a generic all-in-one brand
    • advice: be clear on your own and your partner’s objectives and communicate them; niche reach may just be what they/you want or need

To sum it up, co-branding partners should be chosen very carefully. A beneficial strategy could be to roll out a co-branded product or service gradually (e.g. by region, marketplace, etc.) and adjust it accordingly with the learnings. Likewise, A/B and focus group tests can help to avoid hiccups during the rollout of the actual marketing campaign.

Co-branding goals

Generally, there are four main co-branding goals:

  1. Market penetration: increasing the market share of a product in a specific environment
  2. Global brand strategy: merging global recognition with localization through core values, and CI
  3. Brand reinforcement: activities to ensure that newly created brand equity does not depreciate over time
  4. Brand extension/stretching: a brand’s established reputation serves to launch a new product

So, how does all of this translate to the Chinese market? Let’s find out!

Co-branding in China

Co-branding strategies work particularly well in the Chinese market. Through co-branding, many brands have successfully increased traffic, boosted sales, and taken their brand image in China to the next level over the last few years.

In fact, co-branding is a highly efficient and effective marketing strategy. Now more so than ever in the face of an overall challenging economy post-Covid (inflation, imminent recession, energy crisis, Ukraine war) where many companies are lowering their marketing budgets. Here, co-branding can come in handy to share marketing costs while gaining a large variety of benefits.

Starting co-branding in China

As you are aware, doing business in China has its own rhythm and rules. 

To make your co-branding collaboration in China a “win-win” situation, make sure…

  • …you understand the local culture & social context (conduct market research if necessary) and localize your co-branding strategy
  • …you have completed trademark registration of your brand in China (prevent “trademark squatting”) and register to co-brand timely (do your due diligence beforehand to avoid legal IP infringements)
  • …you have accounts on China’s most popular social networks (WeChat, Douyin, Xiaohongshu, Weibo), so that you can link your co-branding campaigns to your own Chinese social media accounts and your customers can get in touch with you
  • …you have a shop for your ecommerce products that is accessible in China and localized (e.g. payments) – either on WeChat, CBEC or local platforms, or your own Chinese website
  • …to consider limiting the number of co-branding collaborations to maintain exclusivity and credibility of your brand
  • …to have a co-branding and licensing agreement to document the details of your partnership, avoid misunderstandings and legal issues in the future

For example, in terms of culture, traditional Chinese culture is gaining popularity in the aftermath of the global Covid-pandemic. Nostalgia marketing campaigns and partnering with established Chinese brands could be good strategies to capitalize on this development.

The Chinese have even coined a term for the preference for local domestic products: 国朝 (guochao) which can be translated to “national trend”. Unlike the “older” generation in China, younger Chinese did not grow up to learn a “West is Best” attitude.

So, how to find and select an appropriate co-branding partner in China?

Find & Select the Right Partner for Co-branding in China

Co-branding is highly synergetic. Failure to select the right partner to create a sought-after product can easily result in a backfire.

Chinese social media, WeChat above all, is a great place to research potential partners and get a first impression of their overall appearance, and relevance in the Chinese market.

When selecting a co-branding partner, consider the following

  • Are your core values compatible?
  • What is the image, visibility, and reputation of your potential partner?
  • Is there an added value or benefit for the target consumers?
  • What does the other brand have that your brand lacks and vice versa? How could you complement each other?
  • Are your brands competitors in any way or contradicting each other’s values/message
  • Which risks come to mind?

When creating a new product or service, both brands can ask the following questions

  • What do Chinese consumers want and need from this specific brand collaboration?
  • How can brand collaboration fulfill those needs and wants, considering Chinese traditions, beliefs, values, and the inner emotions of the target group?
  • Can adequate product quality, affordable prices, and customer support be ensured?

If you are not sure how to get started, the China experts at Tenba Group are here to help.

Case Studies: Co-branding in China

To demonstrate the power and potential pitfalls of co-branding in China, let’s take a look at a few real-life examples.

Douyin co-branding Hashtag

On Chinese popular social media app Douyin, the hashtag for co-branding “联名” was used in 450 million posts/videos since the hashtag was created (see screenshot below). 

The Chinese character 联 means “united” or “to connect”, and 名 means “name” (in this case “brand”).

Co-branding in China: Douyin co-branding hashtag
Source: Douyin (Q3/2022)

Successful Examples of Co-branding in China

First, we’ll take a look at positive co-branding examples in the Chinese market, and afterwards, we’ll take a look at some negative examples with the objective to gain learnings and insight.

Gucci x Adidas (Global Campaign)

This global 2022 co-branding collaboration by Gucci and Adidas was well received internationally. Their exquisite collection excelled at online brand engagement with an estimated reach of 7 million people and 5,000 organic posts in just 30 days. Celebrities from Harry Styles to Brad Pit are wearing these pieces.

Traditional Italian luxury fashion meets established quality athleisure in this trendy collaboration. Take a look at the second product drop of this campaign in China in September 2022:

Through this co-branding collaboration, both companies have successfully accessed new consumer bases, increased their revenue and sales through combined market strength, and gained many other benefits.

Dove x The Forbidden City Museum

This 2020-collaboration displays a deep understanding of Chinese culture through branding wordplay and excellent co-branding fit.

The Forbidden City Museum (故宫博物院) recently entered a large variety of local and foreign collaborations to expand its reach, including the 2020-Spring Festival collaboration with American chocolate brand Dove (different from the Dove personal hygiene brand).

This co-branding campaign in China revolved around the traditional Chinese concept of “blessings” (福) for the new year. The Chinese character “福” is pronounced as “fú,” which is the same pronunciation as the second character of “德芙” (dé fú), Dove’s Chinese brand name.

At the same time, “德芙” (dé fú) is pronounced like “得福” (dé fú) in Chinese, meaning “blessed” or “to get blessed”.

Tradition has always played an important role in Chinese culture, and even more so in recent years among younger generations. Luck and blessings, especially during traditional Chinese holidays, are particularly significant.

This was a smart and well-adapted co-branding strategy by Dove, honoring Chinese culture respectfully. Partnering with the Forbidden City Museum demonstrated an understanding of the culture that captured the attention and hearts of young Chinese consumers.

The hashtag 我真得福了 “I’m so blessed” was used as a hashtag challenge owned by Dove and promoting the Dove x Forbidden City Museum collaboration. There were six winners, and the first winner received 10,000 RMB (~1,400 USD). All in all, the hashtag was used almost 1.6 billion times – an amazing viral success.

Benefits for the Forbidden City Museum from co-branding campaigns include higher prominence and attracting more visitors (especially from abroad), as well as consolidating its modern and fashionable image among younger generations. On the other hand, the main benefit for Dove is to increase its brand awareness and reach in China.

Co-branding in China (Dove x Forbidden City Museum)
Source: Douyin app (Q3/2022)

Pepsi x People’s Daily

This co-branding partnership from mid-2020 is a prime example of meaningful and engaging collaboration. 

The People’s Daily (人民日报) is the largest newspaper group in China. PepsiCo is the second-largest food and beverage company in the world, behind Nestlé.

During the peak of the Covid-pandemic, Pepsi created four new packaging designs to honor the Covid frontline workers like doctors, nurses, and volunteers. For this, the Pepsi packaging adopted People’s Daily’s signature “newspaper color.”

Besides, Pepsi and People’s Daily also launched a WeChat mini program, where users can take personality quizzes.

Even though these two brands have a rather different brand positioning, they managed to create a culturally appropriate, and successful co-branding campaign, which added positive connotations like humanism to both brands.

Co-branding in China (Pepsi x People's Daily)
Source: mp.weixin.qq.com (Q3/2022)

Here are screenshots from the 热爱守护者 (“love guardian”) campaign on WeChat. The QR code on the left side links to the mini app, and on the right side, you can see a screenshot of the Pepsi x People’s Daily mini app.

Pepsi x People's Daily WeChat mini app (brand partnership)
Source: WeChat (Q3/2022)

Uniqlo x KAWS

The Chinese simply love fashion, making co-branding collaborations in this segment a predestined hit, if done correctly. Fast fashion meets luxury is particularly intriguing.

This mid-2019-collaboration of Japanese casual wear designer Uniqlo and New York-based artist KAWS – famous for his unique graffiti style – is interesting because it led to a significant increase in the search volume for both brands right after the official launch of the collaboration on Chinese search engines and popular social media apps.

Tools like Baidu Index (not reflecting the actual search volume rather than a trend/index) or WeChat Index clearly reflect and demonstrate this. While the same co-branding strategy for the UT COLLECTION was not as successful in Japan and Korea, it was an absolute hit in China. Here’s why and how:

In China, Uniqlo’s Tmall flagship store was sold out within the first three seconds, which is not unusual for the new launch of trendy products in China. At the same time, physical Uniqlo shops in China were also overrun by excited shoppers, which even made the news.

In the screenshot below, you can see a comparison of 优衣库 (Uniqlo, green) and KAWS (blue), using Baidu Index. However, it shows a peak in the search index during the Uniqlo x KAWS campaign launch in June 2019:

Baidu Index Uniqlo x KAWS search index development for brand partnership campaign
Source: Baidu Index
Average Monthly Search Index on BaiduBefore June 2019June 2019After June 2019
Uniqlo~9,000~100,000~9,000
KAWS~3,000~600,000~3,000

Contrary to Western countries, collaborations between less expensive brands with upscale brands often have a stronger impact in the Chinese market due to the accessibility of luxury goods to everyday consumers, especially the younger generation. In China, good and exciting news travels quickly through Chinese social media, especially WeChat, Weibo, Douyin, and Xiaohongshu.

This is also the case in Uniqlo and KAWS’ collaboration. KAWS’ toy sets easily cost several thousand RMB/USD, and consumers love to buy affordable Uniqlo x KAWS t-shirts (UT COLLECTION), starting from 99 RMB (~14 USD), instead, so they can also have “a piece of KAWS at home”.

This is an absolute “win-win” collaboration that guaranteed sales: KAWS with his unique and sought-after design combined with Uniqlo’s accessible and affordable fast fashion.

brand partnership (Uniqlo x KAWS)
Source: uniqlo.com (Q3/2022)

Uniqlo and KAWS launched their first collaboration in 2016 when the line sold almost one million units per month. Besides, Uniqlo also collaborated with Disney, Marvel, Lego, and many more. 

In China, Uniqlo has an established and positive brand image. Through various collaborations, Uniqlo can increase the sentimental and social value among consumers, particularly by ensuring affordability and accessibility among Chinese consumers.

Less Successful Examples of Co-branding in China

Now, let’s take a look at less successful brand partnerships in China, and the lesson to be learned from them.

H&M x Others

Compared to Uniqlo, the brand partnerships by renowned Swedish fast-fashion producer H&M are less successful, in particular, in the Middle Kingdom.

H&M started co-branding campaigns back in 2004 with collaborations including Versace, Balmain, Stella McCartney, and many more.

While the H&M x Alexander Wang partnership (2014) and the H&M x Moschino collaboration (2018) both received positive feedback similar to the Uniqlo x KAWS collaboration, H&M’s cooperations have become less attractive ever since. They couldn’t live up to the expectations in terms of brand awareness, sales increase, and consumer engagement. 

The quality of the co-branded clothing fell short in the eyes of the consumers, especially the H&M x Versace collection, which had a high number of returns, resulting in H&M canceling its return policy for recent co-branding campaigns.

Moreover, fashion producers like H&M and Nike have received backlash after using “Xinjiang cotton” where allegedly Uighur forced labor occurred in the production process. After calls for a boycott from many Chinese, many producers have ceased collaboration with Xinjiang cotton, and H&M has largely retracted from the Chinese market.

Durex x HeyTea

Likewise, this 2019-brand collaboration between Durex (杜蕾斯) x Hey Tea (喜茶) received some negative attention. 

Their joint marketing campaign “for one night” (不眼夜), which was launched on Chinese social media platform Weibo, was unsuccessful due to the ambiguous meaning of “not a single drop would be left tonight” (今夜一滴都不许剩), which is particularly inappropriate in China’s more traditional culture. In fact, HeyTea quickly removed the social media posts and released a public apology

Dolce & Gabbana x Karry Wang

Another example of a less successful co-branding campaign, that even resulted in a backlash and negative feedback, is the 2018-collaboration between Italian luxury fashion brand Dolce & Gabbana x Karry Wang (pop idol and influencer). 

The promotional video by D&G was ill-received due to Chinese stereotypes and disrespect for its culture, following the termination of the brand collaboration.

Even though negative brand attention in the Middle Kingdom is not ideal, damage can be controlled through timely and powerful PR strategies in China.

Learnings from Unsuccessful Co-branding Campaigns in China

Let’s take the quote “When you lose, don’t lose the lesson.” by the Dalai Lama as inspiration to gather learnings from less successful co-branding partnerships in China.

Take into account

  • Do you and your brand partner understand the Chinese market and Chinese mentality?
  • Do you and your potential brand partner share a target market?
  • What do you and your potential brand partner each bring to the table?
  • Which obvious risks come to mind that could arise from the partnership?
  • What elements will you and your potential brand partner share?
  • What does your potential brand have that your brand lacks, and vice versa? 
  • How can the brand message be created in a positive and culturally sensitive fashion?
  • Do you already have brand accounts on China’s most relevant social media platforms, so your new consumers can engage with your brand?

Remember that you can always test co-branded products and marketing messages with Chinese consumer focus groups, e.g. to ensure that there are no cultural, language, or other misunderstandings. A China expert like Tenba Group can help you with this if you like.

Co-branding in China – The Takeaway

In a co-branding relationship or brand partnership, multiple brands work together to create a joint product that represents both of their brand identities. It is an effective way for brands to synergetically combine power, often leading to increased brand visibility and profits at reduced individual costs and risk. 

Co-branding allows each of the involved companies to respond to the ever-changing marketplace and raise brand awareness, as well as tap into new customer bases (e.g. GenZ demographic) and markets, in order to ultimately increase revenue.

  1. Generation Z consumers account for about 30% of Chinese online consumption. They are particularly open to co-branded products and services, in particular, if they have an element of exclusivity.
  2. Chinese GenZ consumers return to traditional Chinese values. Local brands that embody Chinese values and nostalgia marketing have an easier time capitalizing on this.
  3. Overseas brands should understand Chinese culture well and adapt their brand collaboration respectfully and authentically instead of just “riding the guochao wave” to avoid backlashes.
  4. If done appropriately, co-branded products can be a win-win-win for local and international brands as well as consumers.

When carried out correctly, co-branding offers “the best of both worlds” through combined compatibility and efficiency to create a “win-win” situation. Leverage China’s “fans economy” and maximize its potential through strategic brand partnerships.

co-branding in China

Would you like to discuss if and how co-branding in China could accelerate your success in the Middle Kingdom? Or would you like to explore other potential China marketing options for your brand?

Whatever your situation, goal, and budget – the Asia specialists at Tenba Group are happy to talk China with you. Message us for your FREE consultation.

Discover a large variety of additional China marketing options to boost your brand in the Middle Kingdom cost-effectively depending on your individual needs.

The post Co-branding in China – Reach Chinese Consumers Synergistically appeared first on Tenba Group.

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Selling Food via CBEC vs. Import Food to China https://tenbagroup.com/selling-food-via-cbec-vs-import-food-to-china/ Wed, 07 Sep 2022 07:36:37 +0000 https://tenbagroup.com/?p=25001 Importing food to China is popular among all Chinese demographics. It satisfies the Chinese middle class’s desire for high-quality and luxury products from abroad.  If you may wonder why that is, food has actually always been a very important part of daily life for Chinese people. This includes shopping for fresh food and cooking from …

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Importing food to China is popular among all Chinese demographics. It satisfies the Chinese middle class’s desire for high-quality and luxury products from abroad. 

If you may wonder why that is, food has actually always been a very important part of daily life for Chinese people. This includes shopping for fresh food and cooking from scratch every day. The Chinese enjoy food as an important element of family and business. They believe that eating good food can bring harmony and closeness to family and (business) relationships.

Are you curious about exporting food to China, but not sure how to comply with the country’s strict and ever-changing import regulations and decrees? Then maybe the CBEC model is a viable alternative for you.

Take a deep dive into the Middle Kingdom’s imported food industry with the China experts at Tenba Group.

The Food Industry in China

China’s annual import value of processed foods and beverages increased by 85% to almost 96 billion USD between 2016 and 2020. The main countries of origin are New Zealand, Australia, Thailand, Indonesia, and Brazil.

China’s 1.4 billion population, the constantly rising living standard of the average Chinese people, and the vastly growing middle-class demand foreign-made products. These sought-after imported products represent status, safety, and health, which is especially relevant because local Chinese counterfeit and harmful products unsettled Chinese consumers in the past. 

Today, Chinese consumers pay particular attention to a combination of safety, price, and ingredients. Besides, they place emphasis on the status that imported products represent – being able to afford these more expensive and overall “better” products – as well as the emotional component – the “good feeling” of buying and using original products, e.g. olive oil from Greece.

The highest imports in the food sector into China are meat, dairy, oil, alcohol, candy/cookies, and seafood. Alongside the current fitness trend, the Chinese interest in organic, plant-based, and healthy foods including supplements is rising.

With this in mind, the potential for healthy high-quality imported food and beverages in China is limitless. The high reputation of foreign goods also makes them ideal gifts for doing business in China as well as for private occasions. For example, imported wine is a popular gift among business people.

General Trade Food Import

Foreign (food) products are often imported through traditional offline wholesale markets like distributors in China or China Resources Vanguard that sell their products through nationwide supermarkets. Likewise, foreign wholesalers like Costco are starting to open stores in China.

If your business has a legal entity in mainland China, you can directly import your goods from abroad. If this isn’t the case, a legal entity in China (subsidiaries, trade agents, Chinese manufacturers, distributors) can import foreign goods for you. 

This entity handles the import process for you, including customs clearance, duties, taxes, and so on. Once the goods are imported, they can be sold (1) in physical retail shops or (2) online through own stores or online marketplaces like Tmall, JD, or Pinduoduo.

Cross Border Ecommerce Food Import

In case a business doesn’t have a Chinese entity, foreign products can be imported to China easier through the so-called Cross-Border Ecommerce at preferential duty rates and without a license to operate a business in China. Overall, this is much easier than the regular import procedure to China. Keep in mind that there is a positive list of products that are allowed to be imported via CBEC into China, and some products are not authorized.

The Chinese CBEC method is a fully separate, official, and state-sanctioned trade channel for imported goods. It refers to a direct import of goods from outside Mainland China, and relies on the use of CBEC platforms like Tmall Global (tmall.hk) and JD Worldwide (jd.hk).

A foreign legal entity can export its products to a bonded warehouse in China (B2B2C) or via a direct mail (B2C) model. Custom clearance is only triggered after an online order, and the consumer pays duties and taxes on the retail price. In terms of Chinese online shops, an own website, a WeChat shop, or a marketplace e.g. on tmall.hk or jd.hk can be used.

Finally, CBEC goes hand in hand with the latest online marketing trends like live streaming, short videos, and KOL influencer marketing.

General Trade vs. CBEC

When selling foreign goods in China, the main differences between the two options are:

  • General trade: seller-driven, partner-reliant, higher profit margin, lengthy process
  • CBEC: consumer-driven, shorter value chain, fewer risks for foreign business, no import/export license needed, lower profit margin, faster process (capital required for deposit and commission)

For smaller businesses and brands that are new to the Chinese market, CBEC is a much easier and faster way to sell goods in China, although deposit costs for opening online stores and marketing expenses must be considered.

Licenses & Regulations

Generally, for non-CBEC imports, the Chinese PRC Food Safety Law (2021) regulates the production, circulation, recall, and import/export of food products in the Middle Kingdom. This ensures that food quality and integrity are maintained through safety, hygiene, and other standards.

The National Medical Products Administration (NMPA) is a ministry-level agency responsible for drafting laws, regulations, rules, and policy plans on the administration and supervision of food in China.

Until 2013, the NMPA was called China Food and Drug Administration (CFDA), which was based on the State Food and Drug Administration (SFDA). 

Producing, trading, and/or selling food in China requires a license (food safety and quality). Besides, a food import and export license is required as well as a food inspection by the local Entry-Exit Inspection and Quarantine Bureau.

According to order no. 248, which became effective on 1 January 2022

  • all food manufacturers and distributors must register with the General Administration of Customs of China (GACC)
  • new label requirement includes a registration number

Now, let’s take a look at how to import food to China.

Ways of Importing Food to China

Basically, there are three ways to import food (and other products) to China. 

We have listed these options in order from easiest (for smaller brands to test the market or to import specialty products) to more complex (for larger brands with established awareness and reputation to expand their business).

  1. China Distributors (e.g. 1688, Baidu B2B, Tmall TDI)
  2. CBEC (e.g. tmall.hk, jd.hk)
  3. Own Chinese Import Export Company via Local Platforms (e.g. Tmall.com, JD.com, Pinduoduo)

Let’s take a closer look.

1. China Distributors

Generally, distributors handle the whole supply chain and logistics process. This option may be best for those who are smaller and larger businesses that are new to the Chinese market or want to expand their reach. However, this method has lower profit margins overall.

Finding and collaborating with the ideal distributor for your product and needs can be challenging. We have compiled everything you need to know about China distributors for launching your brand in China.

2. CBEC

Foreign products generally can be imported to China via the cross-border ecommerce method. The main marketplace platforms for this are www.tmall.hk and jd.hk. Starting your own ecommerce shop on your website or WeChat shop are also an option but requires more intense marketing efforts.

Keep in mind that this is only possible for whitelisted CBEC food product groups.

CBEC Taxes

According to the Chinese cross-border ecommerce retail import tax policy, the following tax rates apply as long as the value of goods is (1) below RMB 5,000 (~740 USD) for individual transactions, and (2) below RMB 26,000 (3,900 USD) per buyer per year.

  • Tariff rate: 0%
  • Import VAT and consumption tax: 70% of the statutory tax payable

The calculation is as follows:

  • Taxes = unit price x number of pieces x comprehensive tax rate for cross-border ecommerce 
  • Cross-border ecommerce comprehensive tax rate
    • Standard (no consumption tax, e.g. beer) = 70% of VAT 
    • Consumption tax (e.g. wine) = [(consumption tax rate + VAT rate)/(1-consumption tax rate)]×70%

These reductions can only be deducted from the amount of the product, and the shipping fee is subject to tax. If the goods are returned for personal reasons, the taxes and fees will not be refunded. In case the goods are returned due to problems with the product itself, the taxes and fees may be refunded by the respective ecommerce platform.

Now, let’s take a look at the specific tax rates for products that are legally possible to be imported via the CBEC method. This also gives you an indication of what foreign products are sought-after by Chinese consumers.

In the food category, liquids (milk, oil, juices), alcohol (wine, beer), and snacks are popular CBEC products.

CategoryVATConsumption TaxCBEC Tax
Cereal, potato chips, puffed food13%0%9.1%
Chocolate13%0%9.1%
Dried fruits13%0%9.1%
Nuts13%0%9.1%
Coffee13%0%9.1%
Mineral water13%0%9.1%
Soda13%0%9.1%
Milk (non-powder)13%0%9.1%
Fruit juice13%0%9.1%
Chewing gum13%0%9.1%
Fondant13%0%9.1%
Brown sugar13%0%9.1%
Vegetable puree13%0%9.1%
Puree13%0%9.1%
Condiments13%0%9.1%
Pasta13%0%9.1%
Biscuits13%0%9.1%
Canola oil9%0%6.3%
Olive oil9%0%6.3%
Linseed oil9%0%6.3%
Natural honey9%0%6.3%
Wine13%10%17.9%
Sparkling wine13%10%17.9%
Beer13%0%9%
Instant bird’s nest13%0%9%

So, if you are wondering how to export food and beverages to China, China’s largest CBEC platforms – Tmall Global and JD Worldwide – are an excellent place to get started. Let’s take a look.

Tmall Global

In 2014, Alibaba, launched the CBEC platform Tmall Global (tmall.hk), which is separate from Tmall (tmall.com) and has now become the largest Chinese cross-border ecommerce platform with a market share of more than 30%. The platform has about 500 million monthly users.

Tmall Global currently offers more than 20,000 brands from 77 countries, making it the ideal marketplace for foreign brands to sell directly to Chinese consumers without a company or physical presence in China.

Using Tmall Global requires registering a Taobao account online or downloading the Taobao app (淘宝) from the Google Play store or Apple store. Alternatively, you can login with a Weibo account online or through the Weibo app.

In theory, registering these accounts works with any email address, Chinese or international phone number. In practice, attempting to register these accounts outside of China is challenging with various system error messages, e.g. phone number format not recognized.

In the food sector, the most popular brands on Tmall Global are Kroger, Nestlé, Aldi, Woolworths, Perrier, Lidl, emart, Doppelherz, Unilever, and Mars.

Upon searching for 进口食品 (imported food) to get an overview on Tmall Global in September 2022, these were the main results: 28,319 results (products) and 1,307 shops.

Brands (品牌)
Swisse: Australian supplementsNATURELAN小月神CAUDALIE/欧缇丽
AMWAY/安利Nature Made/天维美GO healthyUnisom
vitafusionFair&PurePurasanaS SELECT
LIFE SPACE: Australian supplementsNature’s Way(澳大利亚)爱司盟意之宝
Calbee/卡乐BNUTRITIONtasto龙角散
NATROL(美国)ThorneVIVA Naturals宫武(日本)
KIRKLAND Signature/科克兰Bio-ENatures AidBioloving
Jamieson/健美生: Canadian supplementshuebnerUNIKALKCareline
Herbalife/康宝莱nature’s truthThis Works大哥
NOW/诺奥SALUSNestle Health Science/雀巢健康科学Morinaga/森永(日本)
One a dayNATUREWISEHubnerTriomar
Healthy Care: Australian supplementsOPPULAND/欧普兰Biocytewagner
GNC/健安喜: US-American supplementsORIHIRO/欧力喜乐舞昆OMEGOR
Doppel Herz/双心: German supplementsLay’s/乐事nutrimexxVitaRealm
Isdg: Japanese supplementsGreen Max/马玉山RAPID白猫
FANCL: Japanese supplementsinomatamedicurasamlip
BLACKMORES/澳佳宝: Australian supplementsAFC(日本)ARRAVITEPhD(英国)
Move Free/益节: US-American supplementsAZOFairvital酒豪传说
Doctor’s Best: US-American supplementsMetamucilHERB EQUATIONhealth home
Puritan‘s Pride/普丽普莱Nestle/雀巢AGEPHA PharmaUNCLE TOM
PipingRockimakara永明制药SPRUTRITION
Confidence USA: US-American supplementsSVELTYA.S AmansongVinsic(保健品)
Herbs of Goldelevit/爱乐维herbalandWAKAMOTO
ITOHViyouthPOPCORNERSSANADA SEIKO
DHCCULTURELLE/康萃乐BIOHOUSEUS Clinicals/优克利
CENTRUM/善存NHPVEG TOMETOSPERMIDINELIFE
NOROMEGAblack peachFOR BECARED ONEbio well
SWANSONMITOQBENMAXYAMADA(日本)
NAKAYA(日本)小林制药asvelPATAR
Nature’s Bounty/自然之宝Orthomol/奥适宝AMMEX/爱马斯Natural Life
UnichihelasliminnerhealthHIGHCOOK/韩库
BYHEALTH大字Vitanergy/维生能EQVILLE
Holland&Barrett/荷柏瑞SorLife大木制药AB
Garden of LifeCatalo/家得路NUTRA·LIFE/纽乐Venus Recipe
Schiff山本汉方cametteOUU
CALTRATE/钙尔奇LACTO-FITbio islandMEDOX
POLA/宝丽: Japanese supplementsRoyal Oak HealthAnthogenolEric Favre
WARNKE VITALSTOFFE: German supplementsAXXZIArxonSunbio
NY-O优佳新谷酵素高丽银丹
MUSCLETECH/麦斯泰克荣进制药Crystal StarEkizenjin/益善臣
metaboliclife extension: US-American supplementsNPSSUPPmenevit/爱乐维
GEMEZASAHI/朝日ON/奥普帝蒙Eunova
CenovisPILLBOXVIK(保健食品)mollers
Elexir PharmaOsteoisleepWDCYH/威氏
野口医学研究所purmeoYouthit/优思益MYNI
WRIGHT LIFE/萊特維健geetopGloryFeelprosupps
Ostelin/奥斯特林Omni BioTicCELFULLOsteo Bi-Flex
nutrition careFine海太 
明治药品OsteoformEZZ 
SOLGAR柏澳斯SAN PETER 
Tmall Global platform overview
Source: tmall.hk (September 2022)

Tmall Global Import Supermarket (TDI)

Tmall Global even has a dedicated import supermarket 天猫国际进口超市 (直营) that acts as a distributor for international goods. The 直营 in brackets stands for direct sales, meaning the shop is managed by Tmall directly, including marketing, logistics, and so on.

TDI is ideal for smaller brands outside of China that want to test the Chinese market without opening their own shop right away and at minimal risk (manageable and predictable financial investment).

This direct consignment model is optimized for fast-moving consumer goods (FMCG) and top-selling goods (SKUs). Brands can choose to invest in marketing for their products on this Tmall platform. 

This store describes itself as a lifestyle supermarket offering the best selection of imported goods from all over the world to their Chinese customers.

Global food businesses can register for the Tmall Global Supermarket here (Chinese language only).

Tmall Business Models

The main differences between the international Tmall business models are as follows:

Tmall Global Store (TMG)Tmall Direct Import (TDI)Tmall Global MinistoreTmall Overseas Fulfillment (TOF)
ModelBrand manages its store on Tmall Global or with the help of a Tmall PartnerImport procurement program; direct purchases from global brands and direct sales to Chinese consumersShop in Shop (TDI)Consignment
WarehousebondedBonded; six warehouses worldwidebondedAlibaba overseas warehouses; TOF centers currently in Japan, South Korea, USA; expansion plans to Europe
PaymentLocal currencyLocal currencyLocal currencyLocal currency
Marketing & SalesBrand or Tmall PartnerTmall GlobalTmall GlobalTmall Global
Ownership of customer dataBrandTmall GlobalTmall GlobalBrand, Tmall Global
Who is it forBrands that want more control over the process, higher marginBrands that want to outsource most of the process, lower marginLow cost market entry, ideal for SMEsFlexible inventory, ideal for testing

Taobao

Alibaba-owned Taobao (C2C) is one of the most visited websites in the world. It has more than 1 billion products listed and almost 500 million monthly active users.

Most Chinese consumers shop for local and international products on Taobao, which displays both Tmall (local) and Tmall Global (foreign) brands. 

As an example, we’ve searched for 橄榄油 (olive oil) on Taobao as an example to demonstrate how the listings and products are displayed. See the screenshot below (left to right).

  1. XEAOTO Mediterranean: purchase via Taobao
  2. Olivoilà: purchase via Tmall
  3. XEAOTO Mediterranean: purchase via Taobao
  4. ABRIL: purchase via Tmall Global (TDI)
Taobao platform overrview
Source: world.taobao.com (September 2022)

JD Worldwide

JD first specialized in electronics and today offers a wide variety of products on JD Worldwide for global B2B imports. The platform has more than 20,000 brands, more than 10 million SKUs, and about 335 million annual active users. JD Worldwide is an import business and incubator for overseas new products and brands to enter the Chinese market.

As JD’s major stakeholder is Tencent (WeChat, QQ), JD products are also displayed on WeChat when searching for products and can be purchased via WeChat Pay. 

Compared to Tmall Global, JD Worldwide is less expensive overall while massively investing in high tech to realize drone delivery and autonomous driving vehicles.

When searching for 进口食品 (imported food) on JD Worldwide in September 2022, these were the results: 

A total of 7,533 products/brands are listed on JD Worldwide under imported food. The most sold products are Danisa, Meixin, and Knoppers, who all have their own flagship stores. 

At the moment, due to global logistics issues and supply chain disruptions, fewer than usual CBEC products are available in China, in particular, on JD Worldwide, where the filter has to be changed specifically to remove out-of-stock products. This last step was necessary in Q3/2022 to see any olive oil products available – otherwise, none were visible.

  • Walmart
  • JD Mall (京东进口超市): an import supermarket like Tmall’s TDI
  • Rakuten
  • Sam’s Club
  • The Hyundai: a D2C store

Apply to become a supplier on JD Worldwide.

Top brands (品牌)
  • 皇冠(Danisa): Danish butter cookies
  • 美心(Meixin): Chinese moon cakes and wafer waffles
  • 莱家(LOACKER): Italian wafer waffles
  • Knoppers: German chocolate wafer waffles
  • 钙芝(Cal Cheese): Indonesian cheese crackers
  • 百乐顺(Bahlsen): German biscuits
  • 爱时乐(Astick): wafer biscuits
  • 杰克布森(Jacobsens): Danish cookies
  • 好丽友(ORION): Chinese small custard pies
  • 三立(Sanritsu): Japanese cookies
  • 波路梦(Bourbon): Japanese cookies
  • 格力高(Glico): Japanese biscuits
  • 不二家(FUJIYa): Japanese cakes
  • 沃尔克斯(Walkers): Scottish shortbread
JD Worldwide platform overview
Source: jd.hk (September 2022)

3. Own Chinese Import Company/Chinese Subsidiary

This option may be more suitable for those who already understand the Chinese market and have established brand awareness, business networks, and partners, as well as an understanding of the logistics and administrative processes.

While this method may require advanced business knowledge, the profit margins are higher. The largest ecommerce platforms in China are Tmall (tmall.com) and JD (JD.com). The most relevant social ecommerce platforms are Xiaohongshu and Douyin, and one of the biggest B2B platforms is Alibaba’s 1688.com.

Case Study: Olive Oil on Tmall Global & JD Worldwide

Olive oil is rapidly gaining popularity in China with steeply rising imports. In 2021, almost 145 million USD worth of virgin olive oil was imported into the Middle Kingdom. That’s an increase of 17% compared to the previous year, which can partly be attributed to the global health trend which is also taking China by storm.

Overall, olive oil from Spain and Italy is most popular in China. In recent years, olive oil is also gaining popularity as a valuable foreign gift for business and private occasions, similar to imported red wine.

Olive Oil on Tmall Global

As you can see on the screenshot below, when searching on tmall.hk for 食用特级初榨橄榄油 (edible extra virgin olive oil), the following results appear. 

By clicking 更多 (more) on the right-hand side, filters for brands and more appear. A total of 90 olive oil products (19 brands) were listed as a result of our search in August 2022.

import food to China via CBEC: olive oil on Tmall Global as case study
Source: tmall.hk (September 2022)

In the table below, we’re taking a closer look at the olive oil brands and examining their most popular product in terms of sales, price, and the number of reviews.

BrandShopThird-Party Shop/Own ShopNumber of products on tmall.hkSales per monthPriceReviews
ABRIL (艾伯瑞特) – SpainTmall Global Overseas Direct Sales TDI Shop & Distributor Flagship Store by Metro (麦德龙官方海外旗舰店)Third-Party Shop91000+4×1 liter bottles for 219 RMB ( promotion) => 54.75 RMB/liter7,843
BETIS (贝蒂斯) – SpainTmall TDI ShopThird-Party Shop10100+1x 250ml bottle for 49 RMB => 196 RMB/liter31
MUELOLIVA (品利) – SpainTmall TDI ShopThird-Party Shop9832x 750ml bottles for 109 RMB (promotion) => 72.67 RMB/liter 313
clemente – ItalyTmall Overseas Flagship Store (海外旗舰店)clementeOwn brand shop4641x 1.5liter bottle for 89 RMB (promotion) =>59.33 RMB/liter83
La Española (莱瑞) – SpainTmall Overseas Flagship Store (海外旗舰店) La Española Third-Party Shop25501x 200ml bottle for 49 RMB (promotion) => 245 RMB/liter140
Kidonakis – GreeceTmall Overseas Flagship Store (海外旗舰店)KIDONAKISThird-Party Shop29481x 250ml bottle for 128 RMB (promotion) => 512 RMB/liter17
GENESSA – SpainKaola Flagship StoreThird-Party Shop1421x 750ml bottle for 128 RMB (promotion) => 119 RMB/liter2,426
Plasmon (派乐萌) – ItalyTmall Overseas Flagship Store (海外旗舰店) PlasmonThird-Party Shop1271x 250ml bottle for 99 RMB (promotion) => 396 RMB/liter52
Baiduoli/Abaco (佰多力) – SpainTmall TDI ShopThird-Party Shop9241x 200ml bottle for 49 RMB (promotion) =>245 RMB/liter12
Borges (伯爵) – SpainTmall TDI ShopThird-Party Shop5201x 2liter bottle for 125 RMB (promotion) => 62.50 RMB/liter3
MolonLave – GreeceTmall Overseas Flagship Store (海外旗舰店) MolonLaveThird-Party Shop3161x 500ml bottle for 78 RMB (promotion) => 156 RMB/liter16
Ajinomoto – JapanTmall Overseas Flagship Store (海外旗舰店) ajinomotoThird-Party Shop4111x 600g bottle for 92 RMB (promotion) => 153.33 RMB/liter118
Jason – GermanyTmall Organic Store Jason Better Food For LifeThird-Party Shop, Ministore (直营品牌站)271x 250ml bottle for 29.80 RMB (promotion) => 119.20 RMB/liter55
EKOPLAZA – NetherlandsTmall Overseas Flagship Store (海外旗舰店)EKOPLAZAThird-Party Shop351x 500ml bottle for 79 RMB (promotion) => 158 RMB/liter1
mesavounos/迈萨维诺 – GreeceTmall Import SUpermarketThird-Party Shop142×1 liter bottles for 259 RMB ( promotion) => 129.50 RMB/liter0
BRAGG – USATmall TDI ShopThird-Party Shop111x 946ml bottle for 201 RMB (promotion) => 212.47 RMB/liter1

There are several Tmall Global stores with different local and international brands as well as distribution and shipping modalities:

  1. 天猫国际进口超市: Taobao Worldwide TDI Shop, products shipped from outside China
  2. 天猫国际进口超市国内现货: Tmall Global Overseas Direct Sales TDI Shop, products shipped from within China
  3. 天猫国际现货平价店: Yangtao MZ World by Alibaba, Tmall Global affiliate, products shipped from within China
  4. 天猫国际省心社: Yangtao Global by Alibaba, Tmall Global affiliate, products shipped from outside Greater China Tmall Global

On some Chinese forums like Baidu Tieba or Zhihu, Yangtao is not regarded as an official online shop and therefore Chinese consumers shy away from it

Now, let’s take a more detailed look at the product display on tmall.hk.

Product Listing Example of Abril Olive Oil

In the screenshot below, you can see a purple frame around the product, which indicates that it is available in the Tmall Global Supermarket (a Tmall-operated distributor for brands that don’t have their own Tmall Global shop).

As you can see in the screenshot below, the country of origin is Spain, the price is 119 RMB (~18 USD) for two bottles with a discount of 59 RMB off the original price of 178 RMB.

Besides, there is a short description of the product as well as a link to the Abril olive oil in the Tmall Global supermarket. There, 2 bottles of Abril olive oil are sold for 178 RMB (~26 USD).

This product is selling 600 bottles per month on average and has received 4,053 reviews so far on Tmall Global. On the Supermarket page, 23,791 have saved this product.

import food to China via CBEC: Abril olive oil case study
Source: tmall.hk (September 2022)

Shop Page Analysis (Example La Española)

The screenshot below shows the Tmall Global (tmall.hk) flagship store of the olive oil brand La Española.

  • 描述 Description: 4.8 (plus 21.67% compared to other stores in the same industry)
  • 服务 Service: 4.8 (plus 19.95% compared to other stores in the same industry)
  • 物流 Logistics: 4.9 (plus 25.2% compared to other stores in the same industry)

The registered shop operator is Baozhun Hong Kong Holding Ltd. – functioning as the marketing agency of the La Española shop.

Keep in mind that in China, positive developments are typically displayed in red color while negative developments are usually displayed in green color (opposite to how it is customary in the Western world).

import food to China via CBEC: olive oil case study La Española
Source: tmall.hk (September 2022)

Olive Oil on JD Worldwide

When searching on JD.hk for 食用特级初榨橄榄油 (edible extra virgin olive oil), the following results appear, as you can see in the screenshot below.

The equivalent to the Tmall Global Supermarket is the JD Worldwide Supermarkt.

On JD.hk, a total of 55 olive oil products (13 brands) were listed as a result of our search in August 2022. 

import food to China via CBEC: olive oil case study on JD Worldwide
Source: jd.hk (September 2022)

In this table below, we are taking a closer look at these brands and examining their most popular product regarding sales, price, and number of reviews.

BrandShopThird-Party Shop/Own ShopNumber of products on JD.hkSales per month rankingPriceReviews
Borges (伯爵) – SpainBeijing China Enterprise Huaye Food Flagship StoreThird-Party Shop111x 750ml bottle for 69 RMB (promotion) => 92 RMB/liter2,200+
BRAGG – USABRAGG Overseas Flagship StoreOwn Shop121x 946ml bottle for 219 RMB (promotion) => 231.50 RMB/liter10+
A Casalbert Since 1959 – SpainCASALBERT Overseas Official Flagship StoreOwn Shop1631x 5 liter bottle for 399 RMB (promotion) => 79.80 RMB/liter20+
Manni – ItalyNational Pavilion + Italian Overseas Pavilion StoreThird-Party Shop1341x 250ml bottle for 324 RMB (promotion) => 1,296 RMB/liter3
Alberta Iannicelli Ceraso 1898 – ItalyNational Pavilion + Italian Overseas Pavilion StoreThird-Party Shop1251x 500ml bottle for 353 RMB (promotion) => 706 RMB/liter10+
皇冠 (AZEITE ROYAL)- PortugalCrown Olive Oil Flagship StoreThird-Party Shop161x 500ml bottle for 138 RMB (promotion) => 276 RMB/liter20+
Olitalia – ItalyTaiwanese Overseas Flagship StoreThird-Party Shop371x 1l bottle for 168 RMB (promotion)100+
Deleyda – ChileLos Andes Beltroad Overseas StoreThird-Party Shop281x 500ml bottle for 50.48 RMB (promotion) => 100.96 RMB/liter100+
California Olive Ranch – USAiHerb Overseas Official Flagship StoreThird-Party Shop191x 500ml bottle for 237.02 RMB (promotion) => 474 RMB/liter60+
Terra Delyssa – TunisiaCostco Overseas Official Flagship StoreThird-Party Shop1101x 1liter bottle for 158 RMB (promotion)20+
Gaea – GreeceiHerb Overseas Official Flagship StoreThird-Party Shop1111x 500ml bottle for 155 RMB (promotion) => 310 RMB/liter80+
Azercay – AzerbaijanNational Pavilion (a JD distributor) – Azerbaijan National Brand PavilionThird-Party Shop1121x 500ml bottle for 46 RMB (promotion) => 92 RMB/liter60+
味之素(Ajinomoto) – JapanYEGO Overseas Official Flagship StoreThird-Party Shop1131x 70gr bottle for 509 RMB (promotion) => 7,271.43 RMB/liter0

Comparison Olive Oil: CBEC vs. Direct Import

When searching for 食用特级初榨橄榄油 (edible extra virgin olive oil) on China’s most popular online shopping platforms in September 2022, direct import platforms have significantly more products and range compared to CBEC platforms.

Nonetheless, CBEC platforms – Tmall Global and JD Worldwide in particular – are excellent as

  • a starting point to sell foreign products in the Middle Kingdom without having a local company or physical presence in China (together with distribution channels)
  • the only way to import specialty products, e.g. cruelty-free products could only be imported to China through CBEC for a long time
  • market expansion and brand control for established and larger brands

What’s noteworthy is that except for three brands, Tmall Global and JD Worldwide offer different brands of imported olive oil products.

In the following table, we are comparing traditional direct import and CBEC platforms in terms of their olive oil portfolio.

Traditional local: TmallTraditional local: JDCBEC: Tmall GlobalCBEC:JD Worldwide
URLtmall.comjd.comtmall.hkjd.hk
Number of brands1854191913
Number of products2,0334,3009057
Number of shops3166641210

In terms of olive oils, for CBEC Tmall Global is more attractive compared to JD Worldwide and for traditional local platforms it is the other way around: JD is more attractive compared to Tmall.

Olive oil brand list on direct import and CBEC platforms in China:


Olive oil brand
Traditional local: TmallTraditional local: JDCBEC: Tmall GlobalCBEC:JD Worldwide
皇冠 (AZEITE ROYAL)x
A Casalbert Since 1959xx
Abrilxx
Agricx
ajinomotoxxxx
Alberta Iannicelli Ceraso 1898xx
Andasaludsiax
Azercayxx
Baiduolixxx
Baker Dreamx
Bertollix
BETISxx
big benxx
Borgesxxxx
BAIKAL PEARLx
BONISSIMOx
BRAGGxxxx
calenax
California Olive Ranchxx
CASAS DE HUALDOx
CARBONELLxx
CATERALxx
CLEMENTEEbestxx
Cook moralxx
COSTA D’OROxx
cufrolx
Cwgcx
Deleydaxx
EK Elenikeyx
EKOPLAZAxx
Faigesxx
FANACEx
FGHGFx
fragatax
Gaeaxx
GARDEN TASTEx
GENESSA easy lovex
Golden Sunx
Grandpa’s Farmx
Gredonx
Guglielmix
HADAYx
ITALUSx
Jason Better food for lifexxx
JUSSMINIxx
Kidonakis Oleoestepaxxx
knifex
La Espanolaxx
La Flor de Malagax
Land of Olivex
Los Corrales De La Sierrax
Liuli Farmx
LONGEVITY FLO WERx
Mannixx
Masterx
Member’s Markxx
mesavounosx
MIGHTYx
MOLON LAVExx
Morozoffx
MUELOLIVAxx
NISSHIN OILLIOx
Oleo Bellax
OLEOESTEPAx
O-Live & Cox
Olitaliaxxx
Olivoilax
OLLERxx
OLVx
orcix
ORION 1966x
Ovorax
PICCOLOx
Plasmonxx
RANIERx
RHINOx
ROLANDx
StarRSx
Seaheyx
SHAN RUN CAMELLIA OILx
Soler Romerox
SOLEADAx
STARx
Spartatreex
SUNDRYx
Terra Delyssaxx
TRAMIERx
UFULLYONx
Urzante Dbonolivex
Vigeanx
VFOODSx
Wonder Farmx
YOJIx

This brings us to the end of the article selling food via CBEC vs. importing food to China.

Strategic Guide on How to Import Food to China

If you are wondering, how to export food to China and start selling your food products via CBEC, here’s how:

1. Market Research

If you are new to the Chinese market and/or export to China, marketing research in China to expand your business is a great way to get started. Get an overview of your market segment, potential target audience, competitors, pricing, and much more. Besides, here are some additional tips to conduct China market intelligence.

This will help you validate your business model for the Chinese market and to determine your next steps.

2a. Food Distributor Research & Outreach

Get started quickly and easily by collaborating with Chinese distributors.

For your B2B food brand, the best way to find and connect with China food and beverage distributors is through 1688 (Alibaba), Baidu B2B, and via Chinese search engines like Baidu, Sogou, and Qihoo 360. Moreover, your country’s embassy in China can provide assistance.

Once you have identified your distributors, it is advisable to do a company background check and check their experience with your niche to assess their capabilities and trustworthiness. 

If you would like assistance with this, researching suitable distributors, and getting their English contact information, a China expert like Tenba Group can help.

Find out more about Chinese B2B marketing and how to connect with Chinese distributors for your niche.

2b. CBEC

Selling your food items or other products in China is relatively straightforward through the cross-border ecommerce (CBEC) model on Tmall Global and JD Worldwide.

Besides, social commerce platforms like Douyin, Xiaohongshu, Kuaishou, and Pinduoduo are providing more and more ways to set up CBEC shops.

How to sell your products on Tmall Global and/or JD Worldwide

  1. Register your company on Tmall Global and/or JD Worldwide
    1. Tmall Global: submit your brand: www.tmall.hk/merchant/reg 
    2. JD Worldwide: send an email: worldwide@jd.com
    3. Keep at hand: business license, contact details, trademark registration, license agreement, authorization letters, bank details
  2. Open a brand store or sell through marketplaces or distributors (e.g. import supermarket)
  3. Start selling your products
  4. Optimize your store with learnings and ads
  5. Consult a China expert like Tenba Group for assistance

Note that JD Worldwide requires a USD bank account. For both CBEC platforms, your warehouse can be outside of China or you can use a bonded warehouse in China.

To further promote your brand consider 

  • PPC/banner ads on Baidu, Tmall, Taobao, and JD as well on social commerce platforms (Xiaohongshu, Douyin, etc.)
  • KOL influencer marketing including live streaming

CBEC Platform Fees

CostTmall GlobalJD Worldwide
Security deposit (to be refunded if/after the store is closed)25,000 USD15,000 USD
Annual fee5,000 USD – 10,000 USD (depending on product category)1,000 USD
Commission0.5-5% (depending on category)2% – 8% (based on order value)
OtherAliPay fee (1% of order value)
Agency fees for shop management and marketingIndividual agreementsIndividual agreements

Overall, Tmall Global is relatively expensive, and they may reject goods that don’t fit their strategy. Click here for more information on the different Tmall Global shop types and requirements

2c. Own Import Business in China

Starting your own Chinese import company may be the ultimate goal once you have established a network and partners in China, and understand the rules and regulations in the Middle Kingdom better for your product group and business setup.

Once your product has enough brand awareness, and you are ready to expand your business in China, you can consider starting your own import export to China business, using traditional local marketplaces like Tmall or JD, or establish your own ecommerce shop system (website) and/or WeChat shop, which offers more control and possibilities (payment, logistics, etc.).

The basic steps for the import process once you have a Chinese company are:

  1. Complete the import and export registration
  2. Prepare Necessary Documents and Trademark Registration
  3. Labeling of Goods in Chinese (for CBEC not necessary)
  4. Food Safety Inspections and Customs Clearance

If you have a Chinese company, Tmall.com, JD.com, and Pinduoduo as well as 1688 for B2B are the most suitable ecommerce platforms to distribute your food products outside of your own online platform (website/shop, also WeChat shop).

While your partners/platforms conduct the digital marketing and product promotion on your behalf when you sell your international goods through distributors or the CBEC model in China, you have more control over this process when you import food through your own business into China.

To set up traditional & CBEC businesses, we recommend these marketing strategies:

  1. Set up a Chinese website
  2. Chinese search engine optimization
  3. Pay-per-click advertising (PPC) on Chinese search engines and ecommerce platforms
  4. Chinese Social media marketing (WeChat, Weibo, Xiaohongshu, etc.)
  5. KOL influencer marketing

Are you overwhelmed and don’t know how to get started? Or do you simply want to focus on other aspects of your business? The China experts at Tenba Group are here to help!

Import Food to China – The Takeaway

We have now examined in detail the food market in the Middle Kingdom with case studies on olive oil, and the options of importing food to China – through China distributors, CBEC, and direct import.

The case study on olive oil brands on the largest CBEC platforms for food Tmall Global (tmall.hk) and JD Worldwide (JD.hk) revealed the pricing and marketing strategies in this niche as an example for food importers to China.

Finally, we have summarized the strategic steps to import food to China with your international brand: market research, distributor/CBEC/own import, and digital marketing.

Click here to discover more marketing options to boost your brand in the Middle Kingdom.

Selling Food via CBEC vs. Import Food to China - Tenba Group

Are you ready to start with the exciting venture of fresh food export to China? Get started with Tenba Group’s FREE consultation.

The post Selling Food via CBEC vs. Import Food to China appeared first on Tenba Group.

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Leverage the China Fitness Market with Health & Fitness Influencers https://tenbagroup.com/leverage-the-china-fitness-market-with-health-fitness-influencers/ Tue, 19 Jul 2022 11:42:51 +0000 https://tenbagroup.com/?p=24947 The China fitness market is expanding rapidly as the growing Chinese middle-class is seeking a healthy and aspirational lifestyle. The number of fitness studios is surging and health/fitness app downloads are booming. The Chinese – like the rest of the world – have jumped on the health and fitness trend. The fitness industry in China …

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The post Leverage the China Fitness Market with Health & Fitness Influencers appeared first on Tenba Group.

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The China fitness market is expanding rapidly as the growing Chinese middle-class is seeking a healthy and aspirational lifestyle. The number of fitness studios is surging and health/fitness app downloads are booming. The Chinese – like the rest of the world – have jumped on the health and fitness trend.

The fitness industry in China is forecasted to exceed a revenue of 6.2 billion USD in 2024 and become larger than the luxury market segment. As such, it will be the largest fitness market in the world, exceeding the US, India, and Germany. 

Wouldn’t it be great to get a piece of this pie?

Are you an established fitness/health brand in the Middle Kingdom and do you want to grow your audience and reach? Or would you like to expand your successful fitness/health brand into China, and are seeking opportunities to enter the market?

Then, fitness influencer marketing on Douyin and Xiaohongshu might be ideal for you!

From sports brands (sportswear, etc.) to fitness and health products (workout gear, weight loss products, etc.), lifestyle items (supplements, organic food, etc.), and more – this Tenba Group article got you covered to boost your brand in China with specialized fitness influencers – who have millions of fitness and sports enthusiastic followers – focusing on Douyin (the Chinese TikTok) and Xiaohongshu (Little Red Book, the Chinese Instagram).

Overview of the China Fitness Market

Health and fitness are among the hottest trends in the Middle Kingdom. Fueled by homestayers during the pandemic, a healthy, body-conscious lifestyle is sought after by Chinese citizens, predominantly in Tier 1 cities. Besides, the Chinese government is promoting a healthier lifestyle for its citizens.

The majority (80%) of health enthusiasts in China is between 21 and 35 years old. Yoga is a recent favorite health trend in Tier 1 cities and CrossFit is a Millennial megatrend. Moreover, martial art styles cater to a higher-end and more demanding sports audience.

For the average sports enthusiast, especially among the upper middle class, table tennis and badminton (quasi the Chinese national sports), as well as running, basketball, football, and winter sports are the preferred activities of choice.

Whatever their sports of choice, the main motivational drivers for health and fitness enthusiasts are staying healthy, losing weight, body shaping, and stress release. 

Unsurprisingly, the number of gyms and fitness venues continues to practically “explode” in China. This growing health awareness in China boosts the athleisure market, including health apps and fitness influencers. 

Generally, there are many fitness parks, which are mainly used by older people. Therefore, this demographic is overall healthier and fitter in China compared to the rest of the world. Besides, in China, physical activity is an integral part in schools, companies, and communities, where the day typically starts with aerobics or similar physical activities.

Overall, fitness is ingrained much deeper into the culture in China compared to the rest of the world. Not necessarily for body image and muscle building, but to actually be fit, healthy, and mobile, throughout age.

Finally, China has always been a digital first-mover. As such, physical gyms are gradually being replaced by fitness apps, online courses, digital gyms, and other digital services.

The most popular fitness app in China is Keep with more than 13 million monthly active users. Likewise, SuperMonkey is a popular sports app. With its convenient WeChat mini program feature, it targets younger fitness enthusiasts and meanwhile has also established more than 70 physical gyms in Tier 1 cities.

During the Covid pandemic and strict lockdowns, particularly in China with lockdowns in more than 40 cities affecting more than 370 million people, home workouts and fitness classes gained extreme popularity and continue to provide a much-needed escape for people.

Recent developments and the further digital push make the fitness industry more diversified, including boutique and personal training studios as well as overall new gym models, home applications, smart technology, and family fitness.

As part of the wellness sector, fitness, sports, and wellbeing continue to gain importance in China and around the world among the (higher) middle class, who are happy to invest their disposable income in themselves, making it an attractive sector to target for local and international brands.

Finally, body positivity and a wider acceptance of different body shapes and types is also slowly finding its way into the Chinese fitness market.

Future of the China Fitness Market

As mentioned above, fitness is deeply ingrained in Chinese culture and part of everyday life for young and old. It typically goes together with mindfulness and spirituality. 

Physical activities often take place at parks, schools, or community centers, but not typically at fitness studios – yet. Therefore, the share of the Chinese population who exercise in fitness studios and practice fitness as it is known in the Western world, at present is only 5% (70 million Chinese in the year 2020), with a 3% growth rate.

As this fitness industry grows and matures in China, the market continues to specialize, standardize, and diversify. The key stakeholders include gym operators, fitness equipment suppliers, and fitness trainers, as well as sports, fitness, and wellness enthusiasts (consumers).

Therefore, the health/fitness industry and luxury/sports sector may be worth keeping an eye on, also if you are interested in investing in Chinese stocks.

Influencer Marketing on Douyin and Xiaohongshu

Promoting a brand as well as marketing products and services in collaboration with influencers is a popular strategy, especially in China, where consumers simply love KOLs, KOCs, and Wanghong.

This strategy is especially attractive for global health, fitness, and sports brands that are new to the Chinese market and/or have a limited search engine and social media marketing budget for the Middle Kingdom.

Douyin

Douyin is THE trending short video app in China, where a young audience with a significant disposable income and a love for health and fitness products, is waiting to be entertained, advised, and indulged by brands.

While the Douyin app is not available in Western app stores, you can download Douyin for Windows, Android, and TV, as well as Mac here. Besides, Douyin is available as a web platform via douyin.com.

Xiaohongshu

Likewise, working with fitness influencers on Xiaohongshu gives you access to a young audience who visits this social commerce platform frequently and eagerly engages on health and beauty topics.

The Xiaohongshu app is available in the Google Play and Apple stores for download. You can easily log in with your WeChat account if you already have one or just easily create a new Xiaohongshu account.

While Douyin is only available in Chinese, Xiahonghsu is also available in English when downloaded outside of China.

And if you are asking yourself, why choose influencer marketing to boost your sports, fitness, or health brand, the answer is simple. KOL marketing is one of the most cost-efficient ways, and trendy as well, to connect with a large ready-to-buy audience in the Middle Kingdom.

In recent times, fitness influencers in China particularly have created a sort of hype among young Chinese netizens. Their easily accessible, motivational, and positive content especially speaks to a young audience who in the past was often shamed for their slim “unfeminine” bodies. 

Chinese health, fitness, and lifestyle influencers manage to connect with their fans easily through topics that are important to them, their health, and wellbeing. These influencers serve as a bridge between sports enthusiasts and fitness/health-related brands. In particular, through live streaming and short videos, they enchant their fans and followers.

Top Health & Fitness Influencers in China on Douyin & Xiaohongshu

To provide a more detailed picture of how Chinese fitness influencers present themselves and their cooperation partners, we’re taking a look at the top three influencers on Douyin and Xiaohongshu.

Douyin Influencers

雪总健身课堂 (Account ID: xuezong116)

This female influencer, whose name literally translates to “Snow Chief Fitness Classes”, has more than 11 million followers, and provides free online workout classes. She describes herself as a “creator in the field of high-quality fitness”, CBBA fitness trainer (Chinese Bodybuilding Association), and nutritionist of four years on the app.

雪总健身课堂 China Fitness Market Influencer
Source: Douyin app for Windows

Her live sports times are 8am and 7pm, closed on Sundays. The schedule is 

  • Monday: full-body cardio
  • Tuesday: butt shaping
  • Wednesday: Aerobic fat burning
  • Thursday: hip and leg shaping
  • Friday: waist core
  • Saturday: Aerobic fat burning

On the Douyin mobile app (screenshot below), on the left hand side, you can see 雪总健身课堂’s profile with two yellow links: 

  • Product Window (商品橱窗): links to a shop page, where partners can add their own products as well as third-party products that are being promoted (most KOL influencers don’t have their own products). You can see 雪总健身课堂’s on the screenshot below right, where she has 110 promoted products.
  • Official Cooperation (找我官方合作): links to an overview of Xingtu (most information is only available for registered users on Xingtu)

Xingtu (星图) is an integrated Influencer platform on Douyin, which we are explaining in detail (including the metrics) below. Click here to jump to this section.

雪总健身课堂 on Douyin
Source: Douyin mobile app

By clicking on “找我官方合作” on 雪总健身课堂’s profile, you can see the Xingtu information (screenshot below).

Left screenshot below

  • Xingtu Index: 80

Right screenshot below

  • Paid Posts
    • Percentage Of Viewers Watching A Live Stream Until The End: 17.5%
    • Engagement Rate: 1.2%
    • Average Live Stream Clicks: 102,000
雪总健身课堂 on Xingtu
Source: Douyin app

张继科 (Account ID: zhangjike999)

This table tennis athlete, an Olympic games winner, and influencer, Zhang Jike, has more than 9.5 million followers. One of Zhang’s biggest assets, which contributes to his popularity, is his mental strength and ability to win sports competitions under high pressure. 

张继科 China Fitness Market Influencer
Source: Douyin app for Windows

He creates a large variety of content centered around sports and spare time.

On the Douyin mobile app (screenshot below) you can see Zhang’s profile (left) and shop (right).

张继科 on Douyin
Source: Douyin mobile app

When you click on “找我官方合作” on Zhang Ji Ke’s profile, you can see the Xingtu information below.

Left screenshot below

  • Xingtu Index: 65.8

Right screenshot below

  • Paid Posts
    • Percentage Of Viewers Watching A Live Stream Until The End: 21.6%
    • Engagement Rate: 3.5%
    • Average Live Stream Clicks: 108,000
张继科 on Xingtu
Source: Douyin mobile app

仲昭金 Adam (Account ID: zhongzhaojin)

This male influencer Zhong Zhaojin (English Name: Adam), has more than 9 million followers and offers free online fitness classes. In 2016, Zhong Zhaojin was a fitness coach in a popular weight loss TV show in China. Besides, he also participates in a variety of other fitness, sports, and lifestyle TV shows in China. Zhong Zhaojin often does live broadcasts and is a beloved public figure by his fans in China.

On Douyin, Zhong Zhaojin is live daily at 8pm. For a limited time, he offers 50+ weight loss training camps. He also offers youth summer and winter camps.

仲昭金 Adam China Fitness Market Influencer
Source: Douyin app for Windows

On the Douyin mobile app, below you can see Zhong Zhaojin’s profile (left) and shop (right).

仲昭金 on Douyin
Source: Douyin mobile app

By clicking on “找我官方合作” on Zhong Zhaojin’s profile, you can see the Xingtu information as follows:

Left screenshot below

  • Xingtu Index: 79.6

Right screenshot below

  • Paid Posts
    • Percentage Of Viewers Watching A Live Stream Until The End: 18.6%
    • Engagement Rate: 1.7%
    • Average Live Stream Clicks: 53,000
仲昭金 on Xingtu
Source: Douyin mobile app

Comparison of Xingtu Values for our Top mentioned Douyin Influencers

Metric雪总健身课堂张继科仲昭金 Adam
Number of Followers (July 2022)11,236,0009,474,0009,138,000
Received Likes61,514,00070,541,00074,381,000
Xingtu Index8065.879.6
Paid Posts/Percentage Of Viewers Watching A Live Stream Until The End17.5%21.6%18.6%
Paid Posts/Average Live Stream Clicks1.2%3.5%1.7%
Paid Posts/Average Live Stream Clicks102,000108,00053,000

Cost Comparison of our Top mentioned Douyin Influencers on Xingtu

This comparison shows the influencer’s managing agency (所属机构) and lists the advertising price depending on video length. For example, a 1-20 second video on 张继科’s account costs 500,000 RMB (~74,000 USD).

China Fitness Market Influencer - Xingtu Metrics
Source: Douyin app

Xingtu Index & Key Data of our Top mentioned Douyin Influencers on Xingtu

China Fitness Market Influencer - Xingtu Index and Key Data
Source: Douyin app

Personal Video Post Comparison of our Top mentioned Douyin Influencers on Xingtu

The share and engagement rate of Zhong Zhaojin (in the middle) are comparatively low.

Chinese Fitness Market Influencer - Xingtu Personal Video Post Comparison
Source: Douyin app

Sponsored Video Post Comparison of our Top mentioned Douyin Influencers on Xingtu

As there are no metrics available for 雪总健身课堂, it seems she doesn’t collaborate with an agency (MCN) for influencer collaborations and paid brand advertising.

Chinese Fitness Market Influencer - Xingtu Video Post Comparison
Source: Douyin app

Follower Data Comparison of our Top mentioned Douyin Influencers on Xingtu

This chart analyzes the demographics of each influencer according to 

  • gender: e.g. 雪总健身课堂 has 90% female followers
  • age: most followers are between 31-40 years old
  • device type: could correlate to the disposable income of the followers
  • province: mostly Guangdong (the most populous province)
  • interest category: gaming for 张继科 and 仲昭金 Adam, food for 雪总健身课堂
Chinese Fitness Market Influencer - Xingtu Follower Data Comparison
Source: Douyin app

Advertised Products Comparison of our Top mentioned Douyin Influencers on Xingtu

For example, Zhang Jike (on the left) doesn’t seem to promote products in his shop, while Zhong Zhaojin (in the middle) has 10 products.

Chinese Fitness Market Influencer - Xingtu Advertised Products Comparison
Source: Douyin app

Next, let’s take a look at the key influencers on the “Little Red Book”.

Xiaohongshu Influencers

刘畊宏 (Account ID: liugenghong)

This young male influencer has more than 6 million followers. He focuses on fitness videos and is a trending instructor in the Chinese sports ecosystem.

Liu Genghong is originally a Taiwanese singer, actor, and personal trainer who now resides in Shanghai. His regular Douyin fitness live streams, which he started during Covid-lockdowns, became super popular. Liu was even banned temporarily by the Douyin algorithm for being “too fit and exposed”.

But the 49-year-old just kept going, and he’s now doing his fitness classes wearing a jacket. What sets him further apart is that Liu makes his workouts fun, energizing, humorous, and positive overall. 

Furthermore, what makes Liu’s classes stand out is that his wife appears in the fitness sessions, representing the average citizen.

On Tuesdays, Wednesdays, Thursdays, and Sundays, Liu hosts his fitness class at 7.30pm, together with his wife Wang Wanfei. On Saturday, the 90-minute class starts at 9am.

The duo’s videos have gone viral on social media with people imitating the workout routines on their own videos. During Covid lockdowns, Liu’s videos broke Douyin’s live streaming record for 2022 with 40 million views of the most popular video in one month, and the most popular live session attracting more than 1 million live viewers.

刘畊宏 on Xiahongshu
Source: Xiaohongshu mobile app

All in all, Liu is considered a fitness live streaming superstar in China. He reportedly generates up to ~36,000 USD income per day through fans showering him with virtual gifts on live streams that can be converted into cash.

Liu Genghong is a popular influencer and promotes products in various industries besides sports/fitness, including the automotive industry. In the screenshot below, you can see for example Liu’s Cadillac XT5 advertisement.

刘畊宏 ad on Xiahongshu
Source: Xiaohongshu mobile app

李若彤 (Account ID: 203370534)

This female influencer, Li Ruotong, has more than 2 million followers and an overall broader setup with a focus on lifestyle rather than fitness alone.

李若彤 on Xiaohongshu
Source: Xiaohongshu mobile app

Among other promotions, Li Ruptong advertises Lay’s chips, which is unusual for a health fitness influencer. This goes to show that “anything goes” in China and that the right story can create an authentic brand message.

李若彤 ad on Xiaohongshu
Source: Xiaohongshu mobile app

钳钳妈阿曼达呀 (Account ID: 381676973)

This female influencer, short: Amanda,  has more than 2 million followers. Like Li Ruptong she has a broader lifestyle setup beyond fitness alone. 

Born in 1993, Amanda is a young full-time mother, who mainly wants to help other mothers lose weight after giving birth.

钳钳妈阿曼达呀 on Xiaohongshu
Source: Xiaohongshu mobile app

Among her promotions are jewelry (screenshot below).

钳钳妈阿曼达呀 ad on Xiaohongshu
Source: Xiaohongshu mobile app

How to Leverage the Potential of the Chinese Fitness Market with Influencers

To lift the full potential of the health, fitness, and sports segment in China with your international brand, collaborating with KOL, KOC, and Wanghong is a smart move.

  1. Select an influencer that fits your brand and can promote your products and services authentically. Our unique list of more than 150 influencers on Douyin and Xiaohongshu can help you to get started.
  2. Contact the influencer through Douyin/Xiaohongshu, Xingtu (Douyin), or WeChat, and verify their authenticity. Influencers (and their managers) normally speak English. You can simply ask them to send you a message from the official Douyin/Xiaohongshu account.
  3. Negotiate terms and conditions. Influencers may do paid promotions or in-kind agreements. If you would like them to promote specific products, it may be necessary to send them your products (for free, of course). Agree on measurable KPIs to determine the success of your promotion.
  4. Sit back and enjoy the boost of your leads, sales, and brand awareness in China.
  5. If this sounds too complicated for you or you would like to outsource the influencer research, negotiation, and monitoring, a China expert like Tenba Group can help you with this.

Keep in mind that Douyin works with a dedicated influencer broker app, Xingtu.

About Xingtu (星图)

Literally, 星图 means “star map”. In practice, Xingtu is an integrated influencer platform on Douyin.

Douyin influencers typically link to Xingtu on their Douyin profile. Through Xingtu, brands can connect directly with the influencer(s) of their choice, mostly through large Multi-Channel Networks (MCN) – ad companies that typically manage a large number of influencers. This may be particularly interesting for bigger companies with a larger Chinese marketing budget.

On Xingtu, Douyin acts as an intermediary on a commission basis. So you may be able to negotiate better terms and deals when contacting the influencer directly.

These are the Xingtu metrics:

  1. 星图指数 (Xingtu Index): general index summarizing all other indicators
    1. 传播指数 (Live Stream Index): how effective the live streams of the influencer was in the last 30 days (viewers, engagement, etc.)
    2. 涨分指数 (Follower Growth Index): data and trends of the influencer’s follower growth in the last 15 days
    3. 性价比指数 (Cost Effectiveness Index): historical and estimated future CPM/CPC for orders, follower quality, etc.
    4. 合作指数 (Cooperation Index): quality of the collaboration (trust, rating, truthfulness, etc.)
    5. 种草指数 (Promotion Index): quality of promotions (promoted products, click rates, etc.)
  2. 重点数据 (Key Data): potential clicks that brands can generate on their Douyin account when collaborating with a certain influencer (historical data of the last 30 days), information only available with Xingtu registration
  3. 粉丝画像 (Fan Portrait): followers of a specific influencer including follower demographic, information only available with Xingtu registration
  4. 代表作品 (Paid Posts): paid posts by this influencer, rating them either 高 (high) in red (which is good) or 低 (low) in green, which is bad – attention: this is different from the stop light system in Western countries
    1. 完播率 (Rate in Percentage): how many accounts on average watch a live stream until the end
    2. 互动率 (Engagement Rate): how many accounts on average like, comment, or share a post
    3. 播放中位数 (Play Median): average life stream clicks

Here are the various metrics explained based on 张国伟’s Douyin/Xingtu profile. He is another sports KOL influencer, who we use as an example to explain the Xingtu metrics. Kindly keep in mind that Key Data (2) and Fan Portrait (3) are only viewable with a registered Xingtu account.

Xingtu metrics
Source: Douyin app

So, you may ask yourself, what is the benefit of collaborating with influencers through Xingtu vs. contacting them directly via private message?

Advantages of Xingtu

The main advantages of Xingtu over collaborating directly with influencers via private messages are 

  1. transparent price structures
  2. KOL matching, where Xingtu pre-selects suitable influencers for your brand and niche
  3. secure payments and conflict resolution

Once you collaborate with an influencer or create content on your own, make sure that it’s fun and positive, relatable, and that it’s posted regularly/consistently.

This brings us to the end of this introduction to the China fitness market and the top KOL influencer in this niche.

China Fitness Market – The Takeway

The fitness market in China is booming. It is expected to be the largest fitness market worldwide by 2024, exceeding revenue of 6.2 billion USD.

Fueled by Chinese citizens seeking entertainment and activities during the Covid-lockdowns, more awareness of health, body care, and wellbeing, as well as digital trends, the sky is the limit for the fitness sector in China.

More and more brands identify the potential of this sector and push into it. Collaborating with popular fitness instructors, health gurus, and entertainers in this segment (KOL influencers) is a smart and cost-effective way to leverage this potential. Keep in mind that collaborations with top fitness influencers can be costly due to their large reach and engagement.

This is particularly interesting for international health/fitness/sports brands that are new to the Chinese market and/or have a limited search engine and social media marketing budget for China.

Easily and quickly connect with female and male Chinese fitness influencers to market your products and services to your Chinese target audience, who is already interested in a healthy lifestyle, sports, fitness, and general wellbeing.

Is your brand fit for the Chinese fitness market?

Bring more attention to your sports, health, and fitness products and services in China, and get new followers on the popular Chinese platforms Douyin (“Chinese TikTok”) and Xiaohongshu (“Chinese Instagram”) to ultimately increase your sales in the Middle Kingdom.

Click here to find out more and secure your Douyin and Xiaohongshu fitness influencer list with more than 150 contacts. Enjoy lifetime access to this dynamic agency list for a one-off fee only. This hand-picked influencer list is well-structured and makes it easy for you to contact them (via WeChat), even if you don’t speak Chinese.

Discover more marketing options to boost your brand in the Middle Kingdom with a Chinese website, SEO, PR, sourcing, and more.

Leverage the China Fitness Market with Health & Fitness Influencers - Tenba Group

Do you think that a consultant could accelerate your success in the Middle Kingdom? The China experts at Tenba Group are here for you – in the China fitness marekt and beyond!

We are also happy to help you establish contact with your selected influencer(s), and negotiate the best partnership terms for you (additional costs may apply). Contact us for your FREE consultation.

The post Leverage the China Fitness Market with Health & Fitness Influencers appeared first on Tenba Group.

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What is Zhihu? Your B2B Marketing Guide to the Chinese Quora https://tenbagroup.com/what-is-zhihu-your-b2b-marketing-guide-to-the-chinese-quora/ Fri, 17 Jun 2022 13:37:44 +0000 https://tenbagroup.com/?p=24791 What is Zhihu? Find out everything you need to know about the largest Q&A platform in China, and how to lift its B2B marketing potential for your business in the Middle Kingdom. From an SEO boost for your Chinese website to increased brand awareness, free market research and competitor analysis – Zhihu is a powerful …

What is Zhihu? Your B2B Marketing Guide to the Chinese Quora Read More »

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What is Zhihu? Find out everything you need to know about the largest Q&A platform in China, and how to lift its B2B marketing potential for your business in the Middle Kingdom. From an SEO boost for your Chinese website to increased brand awareness, free market research and competitor analysis – Zhihu is a powerful B2B marketing tool in China.

In this Tenba Group article, we take a deep dive into Zhihu, the Chinese Quora, with a particular focus on marketing, branding, and research benefits for your global B2B brand.

What is Zhihu? An Introduction

In Chinese, Zhihu.com (知乎) literally means “Do you know?”. It is China’s largest Q&A platform with more than 120 million answered questions – similar to Quora in the Western world. This means that registered users can ask questions that are answered by other registered users, typically in detail and well-researched. They can like, share, report, and comment on answers, as well as invite other registered users to answer a question.

In general, Zhihu applies a positive upvote system to rate the best answers. Besides, questions and answers can also be shared. As such, the platform’s motto is to ‘share knowledge, experiences, and thoughts with the world’ and to ‘discover a bigger world.

Zhihu was launched in 2011 with funding from Tencent, Sogou, and others, and received further funding in 2019 from Kuaishou and Baidu. In April 2022, Zhihu (NYSE: ZH and HKEX: 2390) went public with an IPO of 4 USD, raising more than 106 million USD. This is a step that Quora has not taken (yet).

Find out more about investing in Chinese stocks and companies.

Zhihu vs. Quora

While both platforms may look similar, the market relevance vastly differs. In the Western world, internet users typically consult Google to answer their simple or more elaborate questions.

On the other hand, Chinese netizens often consult Zhihu due to its high reputation and educated user base. Besides, as the app offers a large variety of verification badges, e.g. as a medical doctor, the trust and authority of such an expert are valued higher compared to other platforms where basically anybody can write anything (and promote it) without verification of the content. 

Finally, Google is blocked in the Middle Kingdom, and local search engine leader Baidu (as well as Sogou, Qihoo, and WeChat in-app search) rank Zhihu questions and answers high due to its investment in the platform. 

In other words, Zhihu has significant authority on the major search engines, which is a sign of credibility, and Zhihu pages often outrank major news outlets for online searches.

Quora was created in mid-2019, just 1.5 years before its competitor. However, Zhihu is hardly a Quora copycat. Zhihu’s users make the platform an expert knowledge space on a wide range of topics including culture, education, career, sports, TV and movies, politics, technology, and lifestyle.

Overall, Zhihu has more features, including the possibility to publish content without answering a specific question, a large variety of paid content (ebooks, podcasts, etc.), as well as the encouragement of short video content and livestreaming.

FeatureZhihuQuora
High-quality user-generated contentyesyes
Ask, answer, vote, follow, and share questionsyesyes
Paid adsyesyes
Englishnoyes
Accessible in mainland Chinayesno
Website and app functionsyesyes
Trending feedyesno
Articles, moments, videosyesno
Paid knowledge content (ebooks, podcasts, consultancy, etc.)yesno

Zhihu vs. Baidu Zhidao

While Baidu Zhidao focuses on quick answers, Zhihu provides more in-depth expert insights and encourages discussion among its users.

Established in 2005, Baidu Zhidao or Baidu Knows (百度知道) is a leading Q&A platform in the Middle Kingdom by Chinese search engine leader Baidu. 

It has more than 400 million registered users with around 24 million daily visits.

Zhihu User Base

Today, Zhihu has around 5.5 million monthly active paying users. Among them are well-known Chinese entrepreneurs, public figures, and intellectuals – many of whom have verified accounts on the platform. This adds to the high reputation and popularity of the platform in the Middle Kingdom. By the end of 2021, there were more than 50 million content creators and more than 460 million content posts on Zhihu.

In general, Zhihu’s user base is

They seek high-quality, informative, and detailed content on current high-level, technical, and premium topics. As users are educated and because a large number of questions are asked and answered, Zhihu users continue to improve their knowledge and capacity, rather than just socialize as is the case on other Chinese social media platforms. 

While Zhihu initially was only accessible through referrals, it has been open to the general public since 2013. Today, Zhihu has become a super community that serves with information and knowledge. But the service goes beyond that. Zhihu also has a social media aspect and ecommerce capabilities, which makes it a valuable platform for brands.

The variety of Zhihu’s functions – from free online courses to paid consultancy services – make its core user base a very engaged community, many of whom are experts in their field.

The Credibility of Zhihu Users

As users have to register to use Zhihu, they are typically eager to fill out their personal profile with education, qualification, and experience in order to prove their credibility when answering questions. 

Their profile (and reputation) then incentivize Chinese netizens to interact in a friendly and helpful way, create content, and build a positive and knowledgeable community within the Zhihu guidelines. 

By providing helpful answers and interacting friendly, Zhihu users can gain positive scores (“Salt Value” on Zhihu), which entitles them to preferred treatment, e.g. when asking questions or contacting customer service.

The Salt Value (盐值) is a social credit feature, which is a homonym of 颜值 (literally face value), meaning attractiveness index.

Zhihu for B2B Brands

Since users are already making in-depth searches for specific topics and niches, Zhihu is a great place for B2B brands to place content marketing for their products, and interact with users. The current most popular topics include movies, IT, finance, and gaming.

Renowned international brands like Audi, Siemens, Airbnb, and Alipay are active and engaged on Zhihu. Being active on Zhihu is particularly relevant for high-end consumer products that require an explanation of their functionality and benefits.

This especially applies to the niches of sophisticated digital products, electrical appliances, baby products, and skin care that target a more affluent population. At the same time, specialty consumer services and products also gain popularity. This includes education, insurance, and medical topics.

Brands can use Zhihu for smart B2B marketing by

  • posting articles and questions (premium branded content), answering questions, posting on other profiles with a wide reach
  • creating professional learning and educational materials, e.g. webinars, video content
  • buying media/sponsored posts/leverage accounts with a big audience
  • following industry hashtags to respond quickly to trending questions with wide reach and relevance to build authority, establish opinion leadership, and acquire new customers
  • running paid ads
  • market research and product/service improvement through understanding the needs and problems of their target audience

For example, B2B brands can provide in-depth questions related to their niche or specific products and services. Make sure to include relevant keywords for your products and services.

Example Audi Business Account

This is the official and verified brand account for Audi (奥迪).

Right side

  • Audi has 146,914 followers (关注着) and follows 9 accounts (关注了)
  • the blue badge means verified, and the orange badge means industry expert, here Audi in the automobile sector (汽车) 
  • Audi received 58,785 Likes and 27 answers were saved

Top

  • Audi gave 94 answers (回答)
  • posted 69 videos (视频)
  • asked 29 questions (提问)
  • posted 82 articles (文章)
  • published 3 columns (专栏)
  • shared 62 ideas/thoughts (想法)
Audi brand account
Source: zhihu.com/org/ao-di-66-50

The Zhihu Business Model

From the beginning, Zhihu emphasized high-quality questions and professional answers, which quickly attracted a large community. The business model of Zhihu is through ads as well as its knowledge and education center. Zhihu strives to become the leader in the “pay for knowledge and education” market in China.

Besides, Zhihu regularly publishes newsletters as well as print and ebooks of aggregated knowledge on specific topics. Overall, Zhihu is in hyper-growth mode with reported revenue of 111 million USD in Q1/2022 (+55% year-on-year comparison).

Zhihu & Chinese Censorship

In the Western world, Zhihu may be perceived as relatively liberal in terms of freedom of speech and largely untouched by the censorship of the Chinese government.

However, this reputation is largely unearned. Zhihu has a small team to monitor discussions on politically sensitive topics to ensure they comply with the law.

This brings us to the end of the introduction on “What is Zhihu”. More information on the Chinese internet censorship and how to still market online.

Relevance of Zhihu for China SEO for Your B2B Brand

Whether your brand is established in the Middle Kingdom or you are entering the Chinese market, being visible on the country’s largest search engine Baidu is key to providing information to prospective customers and directing them to your business.

Answering questions on Zhihu and engaging with online users shines a positive light on your brand and also boosts your Baidu SEO and other search engine visibility. That’s because Zhihu backlinks are valuable (high authority for Chinese search engines) and generate social traffic. Besides, Zhihu users contribute to a lower overall bounce rate once directed to your website as they are interested in the informational content on your website and stay longer.

Baidu is a shareholder of Zhihu and ranks its own or (partially) owned platforms higher on its SERPs, while Sogou and Tencent (WeChat) were early investors in Zhihu. Take a deep dive into the relevance of China SEO in this article.

To sum it up, Zhihu will help with your China SEO strategy through

  • valuable high-authority backlinks
  • generating social traffic
  • lower average bounce rate of the whole website

Users value authentic and real-life answers rather than generic product descriptions, which they can also find when searching the internet. High-quality content, as everywhere, contributes to higher credibility and authority, which in turn is beneficial for the ranking algorithm on Zhihu, Baidu, Sogou, Qihoo, and WeChat.

Your brand and business website achieve higher organic search engine ranks (thanks to the authority of Zhihu backlinks) and traffic to your business website.

Compared to other platforms, Zhihu stands out with a loyal user base who actively researches information on a large variety of topics. These educated and knowledge-hungry individuals typically have a higher attention span and appreciate longer and more detailed content compared to other platforms, where short and animated or video content is often preferred.

This is also reflected in the low bounce rate on your business website (displayed on tools like Baidu Tongji for Analytics), where users that visit your website from Zhihu (e.g. from a brand post with links to your business website) typically stay longer on your website.

Based on our own experience, Zhihu is one of the best social networks in China for local and international B2B brands to not only leverage the platform itself but also generate social traffic to their respective business websites.

How to Register a Zhihu Account

Principally, there are personal and business account types on Zhihu.

Personal accounts

Registering a personal account on Zhihu requires a personal WeChat/QQ/Weibo/Taobao account or a Chinese/international phone number to receive a verification code.

It’s free of charge and the registration process is simple. Registration with just an email address is not possible. Once you’re registered, you can add your email address and link your other social accounts.

Business accounts

Registering a business account on Zhihu and verifying it (official brand account) for government organizations, media outlets, non-profit organizations, and research institutes currently cost 300 RMB (~45 USD). For the time being, you can only pay with WeChat Pay.

Keep in mind that you will need a business license to set up a business account (Chinese or international business licenses are accepted from 2021). It is not possible to transfer personal accounts into business accounts. 

Note that Zhihu currently does not accept business accounts in the following industries: finance/investment/trading, cosmetics/medical, franchise, and emotional consultancy.

Opening a Zhihu Business Account

  1. You will need an email address to register your Zhihu business account. 
  2. Choose between Business, Government/Public Institution, and Other.
  3. Fill out the following business information and upload your Chinese business license:
    1. the business name (same as on the business license), 
    2. the operator name, ID photo, and number, and mobile phone number (SIM verification)
    3. account name
    4. account icon
    5. industry
  4. Verify your account with your mainland Chinese phone number and passport copy. Add additional industry qualifications and expertise for added credibility. You will receive a blue verification badge on your account.
  5. Officially verify your business account (mandatory) to get the blue badge and enjoy extra benefits, e.g. copyright protection, data analysis, additional advertising services, and Salt Value privileges.

Paid Advertisement on Zhihu

After you have completed your business account verification, Chinese businesses can apply for ZhiPlus aka Zhi+ (知+).

To get started, you must charge your Zhi+ profile with 10,000 RMB (~1,500 USD), which can be used as Zhihu ad budget for campaigns. Cost-Per-Click (CPC) starts from 0.25 RMB (~0.04 USD) and the minimum daily budget is 300 RMB (~45 USD).

ZhiPlus allows your business to 

  • promote posts 
  • run ad campaigns
  • boost interactions with your questions and answers
  • create mini-programs that drive conversions,
  • analyze data
  • and more

Keep in mind that you need a business account to advertise with Zhi Plus, it’s not possible with a personal account and if you’re not a registered business in mainland China. If you wish to promote your personal account or international business on Zhihu, you can collaborate with an agency or business account holder to do so. Besides, there are many other free ways to lift the potential of Zhihu through B2B marketing on this platform which you will learn throughout this article so you might not need paid ads.

In case you still require assistance to run paid ads on Zhihu, please contact us. At Tenba Group, we are happy to help you with all your China marketing needs.

Zhihu Personal Accounts vs. Business Accounts

To show you that a business account is not necessarily required to leverage the potential of Zhihu for your business, let’s take a look at Thermtest Asia. This company uses a personal account, which you can also see in the URL “people”. Even though this personal account is not officially verified with the blue badge, it is sufficient to leverage SEO benefits for their website thermtestasia.cn.

They do so through backlinks from Zhihu (which has a high authority), by posting articles, and by answering industry-relevant questions. This generates social traffic at no additional extra cost.

Thermtest Asia account
Source: zhihu.com/people/hong-mei-gui-52-6

On the other hand, Tencent (a Zhihu shareholder) uses an official business account and has the blue verified badge. Here, it says “org” in the URL.

Tencent account
Source: zhihu.com/org/teng-xun-70

Next, let’s take a look at the Zhihu website, app structure, and functionalities.

Zhihu Website Structure

You can search on Zhihu.com without registering on the platform. However, to engage with the community, create, and share content, you have to register. After you have logged in on Zhihu, these are the main functionalities.

1. Top menu

The top menu guides users through the main functionalities, mainly around news on Zhihu, the account, asking, and answering questions.

  • Home (首页)
  • Education (学习)
  • Members (会员)
  • Discover (发现)
  • Waiting for Your Answers (等你来答): Zhihu suggests questions where you may be able to provide helpful information and answers
  • Search bar
  • Ask Questions (提问) – Blue Button
  • News bell
  • Inbox
  • Your account

2. Sub menu

This menu below the main menu mainly shows Zhihu trends and recommendations. 

  • Following (关注): accounts you follow
  • Recommended (推荐)
  • Trending list (热榜)
  • Videos (视频)

3. Right side/creation center (创作中心)

The creation center on the right side allows Zhihu users to become actively engaged and involved with the community.

4. Right side/learning center

This knowledge center provides a large variety of educational material on a wide range of topics.

  • Live
  • Bookstore (书店)
  • Round Table (圆桌)
  • Column (专栏)
  • Paid consultations (付费咨询)
  • Encyclopedia (百科)
Zhihu website menu
Source: zhihu.com

5. Right side/service center

This menu on the bottom right side mainly deals with the account services of Zhihu users.

  • My collection (我的收藏)
  • My followed questions (我关注的问题)
  • My invitations (我的邀请)
  • My balance (我的余额)
  • My vouchers (我的礼券)
  • Service Center (站务中心) – for complaints, ban of information
  • Help and Customer Service (帮助与客服)
  • Copyright Service Center (版权服务中心)
Zhihu website structure
Source: zhihu.com

Zhihu App Structure

First of all, you can download the Zhihu app from your Apple iOS store and Android/Google Play store. There is also a desktop app for MAC and PC.

The HOME screen of the Zhihu app has the following menu:

Zhihu app top menu

  • Ideas (想法): algorithm-based on users’ profiles, questions, concerns, likes, search history, and other parameters
  • Recommended (推存): Zhihu suggestions of other accounts you may like
  • Everything (全站)
  • Live streaming (直播)
  • Many likes (高赞)
  • Categories like entertainment (娱乐), psychology (心理), etc.
  • Trending list (热榜): 50 most popular current discussions
  • Search function
  • Notification bell

Questions, Recommended, Trending list screens in the Zhihu app

Zhihu app menu
Source: Zhihu app

Zhihu app bottom menu

  • Home (首页)
  • Following (关注 )
  • Create (+): post questions, write articles, share videos, and start live streaming
  • Members (会员)
  • Profile (我的)

Following, Members, Profile screens in the Zhihu app

Zhihu app menu
Source: Zhihu app

Zhihu Functions & Features

Now, let us explain the basic features of Zhihu based on the app.

Personal profile

Providing voluntary information like location, education, their industry and work experience adds to a registered user’s credibility and trustworthiness. You can also see the number of followers, credentials, likes received, and more.

Badges

In order to prevent impersonation and fraudulent information sharing, Zhihu introduced a complex authentication system, which includes the submission of several documents for verification. Through this step, users can receive “badges” in their profile under “Recognition and Achievements”. 

Badges include “Excellent Answerer” (industry-specific), “Recommended By Editor”’, “Popular Provider”, “Active User”, and “Sociable Person”, encouraging interactions among the Zhihu community users.

Beyond the scope of other social platforms, Zhihu offers a large variety of verifications and badges, e.g. for lawyers, medical doctors, and other experts in their fields. This adds additional trust and authenticity to Zhihu.

For example, this doctor uses a personal Zhihu account, where he verified that he holds a Doctor’s Degree in Surgery from the Shanghai Jiaotong University (上海交通大学 外科学博士).

  1. blue badge: verified account
  2. orange badge: verified Doctor
  3. brown badge: paying member
KOL influencer on Zhihu
Source: zhihu.com/people/fu-shi-bo

In the Zhihu badge information section, you can see a selection of annual badges that users can obtain while they are a Zhihu member (other badges for verifications are not included here).

badges on Zhihu
Source: zhihu.com

Salt Value 

This social feature incentivizes and rates good behavior to help users gain education, expand their horizons and knowledge, and establish their authority.

The Salt Value (盐值) is viewable for paying Zhihu members only. It can be between 0 and 1,000. It is calculated by an algorithm, taking into account credibility, content creation quality, friendliness, community behavior, and community-building capabilities of a Zhihu user.

Overall, Zhihu allows links to external websites, but sanctions spam links and prefer quality content to quantity content.

This social score also affects the users’ privileges and rights. It is available for paying members only (Salt-Elected Membership).

The Salt Value is composed of the following attributes, which can be used to increase the score: 

  • Credibility: verified professional qualifications and experience, references, certificates, etc. 
  • Content creation: quality and quantity of content published (posts, answers, questions)
  • Friendliness: communicating politely and respectfully
  • Community Behavior: compliance with Zhihu terms, e.g. no plagiarism, no inappropriate content
  • Community Building: interaction with the community, e.g. voting answers, editing content, reporting offending content
membership
Source: Zhihu app

Zhihu Premium Membership

While you can use Zhihu without being a paying member, you need to become a premium member to access extra content e.g. educational services on the platform.

Personal account users can choose a paid option called “Salt Elected Membership” (盐选会员), which costs approx. 3$/month, 30$/year, 8$/season, and 15$/year for students). It provides access to ebooks, podcasts, live streams, webinars, newsletters, and additional benefits.

Zhihu Courses & Zhihu Live

These popular interactive live streaming sessions and courses focus on real-time knowledge sharing and Q&A. Regular Zhihu users share their knowledge, opinion, and experience on a certain topic of their expertise. Other users pay a small fee to join and listen to the presentation. 

Participants can ask questions and get answers from the speaker live and in real-time. This makes learning and sharing knowledge even faster and more entertaining.

Popular examples are beginner makeup classes for beauty brands, technical tutorials to capture the best images/videos for camera gear, or travel hacks for service providers in the tourism industry.

Zhihu Roundtable

These events are basically online webinars of traditional panel talks. Each roundtable consists of one host and four guests (industry experts) who discuss trending topics of their industries with the goal to share knowledge and industry insights. Viewers can interact with the panelists by asking questions.

Zhihu Virtual University & Bookstore

Here you can discover a wide range of paid knowledge and education services, including online courses and audiobooks. Overall, there are more than 15,000 paid knowledge and education products, which are accessed by more than 6 million paid users.

One of the main features is the Zhihu Bookstore, which offers a large variety of ebooks on a wide range of topics. Besides, Zhihu’s own publications and audiobooks include “The Zhihu Weekly Magazine (知乎周刊)”, “1-hour E-Books” (知乎一小时 ), and “The Zhihu Salt-Selection” (盐选杂志) with the latest most relevant questions and best answers. 

Collaborating with Zhihu on these professional learning materials can also be beneficial to your brand if you have relevant content to share and added value to provide.

Zhihu Paid-Consultancy Services

Industry experts can earn extra income on Zhihu by providing paid knowledge as consultation services. Compared to other platforms like Weibo, which has launched a paid health consultancy service, Zhihu offers paid consultancy services on a much wider range of popular topics. 

The fact that only Zhihu users with a Salt Value above 500 can register to become a consultant, adds to the professionalism and authenticity of the consultation service.

Zhihu users can consult with the professional publicly or privately, and the consultants answer the questions with voice recordings. If you choose to ask your question publicly, other users also pay a small fee to listen to the answer, and the person who asks the question receives 50% of this payment. Asking follow-up questions also comes at a small fee.

To ensure quality service, Zhihu gives users their money back if their question is not answered within 72 hours.

Zhihu Column

Besides answering questions, Zhihu also encourages its users to write longer and more detailed articles to increase the capacity of information and knowledge on the platform. Media-rich articles with photos, videos, and infographics are encouraged.

Zhihu Columns (知乎转栏) organizes these articles according to topics. Users who would like to own a column on a specific topic have to submit an application to Zhihu.

Generally accepted topics include economics, finance, IT, science, travel, mobility, and more. On the other hand, Zhihu generally does not accept topics around love, relationships, entertainment, politics, social issues, investment, astrology, and the likes.

Case Studies: How Zhihu Helps B2B Brands

Generally, Zhihu helps local and international B2B brands through

  1. generating social traffic and valuable backlinks to the business website (organic SEO) by creating own questions and articles (social traffic generation)
  2. paid ads (lead generation and sales)
  3. sponsored posts (media buying/KOLs/PR) through posting own content and links on other popular accounts (brand awareness, community engagement)
  4. live streaming, e.g. webinars, beauty tutorials (brand awareness, soft sales)
  5. answering questions from high-volume accounts with your official brand account (brand awareness, community engagement); following industry hashtags is beneficial to stay up-to-date and respond quickly to trending topics
  6. market research and product/service improvement through understanding your audience’s problems and needs
  7. hashtags for trend identification and competitor analysis

1. B2B Businesses Can Boost their Baidu SEO

The first example is a Baidu search for “塞浦路斯移民” (Cyprus immigration), which organically ranks this Zhihu article about “immigration to Cyprus” https://zhuanlan.zhihu.com/p/93439477 on number four.

SEO boost
Source: baidu.com

The second example is a Baidu search for “导热系数测试” (thermal conductivity testing), which organically ranks this Zhihu question on “thermal conductivity testing” www.zhihu.com/question/431164882 on number four. 

In this case, the link does not refer to a Zhuanlan standalone post. Instead, the Zhihu question and its answers rank on Baidu.

SEO boost
Source: baidu.com

2. B2B Businesses Can Generate Leads & Sales through Paid Ads

Leveraging paid ads on Zhihu elegantly combines your brand’s organic interaction with your audience and Zhihu users. Zhihu ads are an effective way to increase your brand awareness and drive users to your products or services. Get immediate reactions in a shorter time, and reach a wider audience.

Zhihu Paid Ad Types

  • Pop-up ads: upon opening the app, interactive functions possible to redirect users to your selected page
  • Newsfeed ads: integrated into the page feed, more detailed than pop-up ads
  • Display ads: appear as banners, videos, or search results on Zhihu’s internal search pages and homepages, users are likely to see these display ads when visiting related pages

All Zhihu ads can drive users to an app store, mini-program, or ecommerce (Tmall, JD.com, etc.) page. Zhihu ads are particularly suitable for B2C brands in the gaming, social media, and ecommerce industry.

Examples 

Here are two examples of a pop-up ad when starting the Zhihu app for Tommy Hilfiger and for Tmall for the 618 Shopping Festival.

pop up ads in app
Source: Zhihu app

3. B2B Businesses Can Boost Community Engagement

Analyze industry leaders and accounts with positive reviews and wide reach, and contact the account owners to place your own branded content (articles, questions and answers, live streams) on their page with your brand mention (sponsored posts).

Here is an example of a KOL influencer, a verified medical doctor, who can leverage third-party accounts with big followings. This is one of his sponsored posts, where he promotes the student platform turnitin.

KOL influencer
Source: zhihu.com/question/23460854/answer/2530869578

4. B2B Businesses Can Leverage Soft Sales

On the right-hand side, you can see a brand account as well as the live stream. This is a webinar for university rankings in Hong Kong by an agency for studying abroad and student recruiting. 

live stream
Source: Zhihu app

5. B2B Businesses Can Elevate Their Brand Awareness

Looking at the log reveals that a private person (an agent) asked the following question in 2017: “想去欧洲移民,去哪个国家好呢?” (Which country in Europe is the best to emigrate to?). As anyone can answer this question, replies also include agents and real estate developers.

Therefore, this is a great method to place your own content, inform your audience, and build your brand awareness. Just keep in mind to focus on helpful and extensive information instead of hard sales. Answers that are focused only on promotional content and sales pitches, likely will get downvoted and, therefore, become invisible to other Zhihu users.

B2B brands can strategically

  • determine relevant questions with a high reach and provide useful in-depth answers
  • identify new questions that will be helpful, and ask those questions with another account
Q&A
Source: zhihu.com/question/52710851/answer/655110792

6. B2B Businesses Can Conduct Market Research

Understand the problems and needs of your target audience, how they think and which services and products they use. For example, an immigration agency could ask the question “美国哪里可以找到房地产中介呢” (How to find real estate agents in the US?).

market research
Source: zhihu.com/question/357473087/answer/913099026

7. B2B Businesses Can Follow Hashtags for Trend & Competitor Analysis

You can search for keywords in the search bar and then click on 话题 (topic) to see the hashtags, their followers, questions using the hashtag, and all discussions. Here is an example of the hashtag 塞浦路斯 (Cyprus). 

When clicking on 更多 (More), you can find further information links to Q&As and posts related to the respective hashtag, based on Sogou Baike (Sogou “Encyclopedia”).

As a B2B company, you can follow relevant industry hashtags to stay up-to-date on current events and developments, create corresponding content, answer relevant questions, and analyze your competitors.

following trends and hashtags on Zhihu
Source: Zhihu app

The marketing method for your brand is determined by your products and services, objectives, and budget. The China experts at Tenba Group are here to provide advice on what’s best for your business.

5 Key Learnings to Use Zhihu Effectively

Based on how Zhihu helps your B2B brand in China, discover the key learnings to use Zhihu effectively.

Zhihu’s educated user base appreciates detailed content and has a higher purchasing power. They primarily want to further educate themselves (beyond entertainment only). Brands can promote (advertise) their products and services on Zhihu as well as directly generate leads and sales.

These are the key benefits of B2B marketing on Zhihu, based on the learnings of the case studies: lead generation and brand awareness.

  1. Adding high-quality content on Zhihu builds your brand credibility, trust, and authority, and therefore, positively impacts Baidu rankings (plus Sogou, Qihoo, Shenma, Toutiao, and Bing) directly, and WeChat indirectly.
  2. Brands can use the answer function to communicate and build strong relationships with their audience to directly generate leads and sales
  3. It is also an opportunity to identify shortcomings of your products and services and make real-life and user-inspired improvements by understanding the needs and problems of your target audience. New brands in the Chinese market can also use the Zhihu forum to conduct market research on their products and services.
  4. Zhihu users have the willingness and demand to deal with larger quantities of content compared to other platforms in China, which focus on short content and videos. Consistency is essential: answer questions fast (the Chinese market is very speedy) by following key hashtags for your business, in-depth, and engage with your community in an educated way.
  5. Zhihu’s highly educated user base has higher expectations for content quality and accuracy. If you cater your content to them, you can lift the potential of positive word-of-mouth recommendations for your brand.

Create a long-lasting positive branding effect for your products and services with high-quality in-depth content on Zhihu through soft-selling and influencing long-term buying decisions.

Brands typically start their Zhihu visibility with Q&A campaigns, by posting and answering questions in-depth (also with graphics or illustrations) that go beyond general public information. This demonstrates their industry expertise and niche competence, builds brand awareness, and helps to find and connect with new audiences.

For example, what was the inspiration for the foundation of your brand, and what does the vision or slogan mean from the brand’s perspective? Technical and scientific information is generally appreciated. Other users can then add their own interpretations if they like.

Further types of questions could be, which product line (flavor, color, taste, etc.) do you like most and why? This can spark active discussions around your brand.

Click here for more insights on China marketing for your B2B brand.

How to Get Started with Zhihu B2B Marketing in 6 Easy Steps

Now that you know what is Zhihu, here’s how you can get started with leveraging the site’s potential for your B2B brand:

  1. Register and verify an official business or personal account on Zhihu.
  2. Engage the community by asking them questions, providing in-depth answers, and publishing articles relevant to your brand and industry expertise. Add graphs, pictures, and videos for added value. Apply a soft selling and long-term customer relationship strategy. 
  3. Create and share professional learning materials (free, freemium, paid content).
  4. Collaborate with industry experts through media buying/sponsored posts/KOLs.
  5. Follow industry hashtags to stay up-to-date and create relevant content.
  6. Consider Zhihu paid advertising, depending on your China market goals and strategy.

Keep in mind that

  1. Zhihu and its user base dislike direct sales activities
  2. Building your brand on Zhihu is a long-term strategy. For short-term immediate results paid ads are more suitable.
  3. Creating useful and informative content is a must as Zhihu users expect high quality and accuracy.

This brings us to the end of how to leverage this Chinese Q&A platform for your B2B brand through smart organic and paid marketing.

Key Benefits of Zhihu for B2B Brands

The main benefits of Zhihu for international and local B2B companies are

  1. SEO boost for your business website (valuable high-authority backlinks, generate social traffic, lower average bounce rate)
  2. brand awareness on a knowledge-centered social platform to reach a quality audience (soft sales)
  3. free market research and competitor analysis (community feedback, hashtags)

What is Zhihu – The Takeaway

China’s Quora-like Zhihu is a powerful marketing tool to advertise your B2B brand, raise brand awareness, generate leads and sales. Especially in the education, career, technology, lifestyle, culture, and medical sectors as well as all industries that require an explanation of its products and services.

Posting and answering questions on Zhihu in-depth and media-rich also provides a positive organic boost on Chinese search engines like Baidu, Sogou, and Qihoo, as well as the WeChat in-app search.

Using Zhihu effectively for your B2B marketing in China isn’t difficult if you keep in mind high-quality and informative long content, consistency, and audience engagement. The formula for success on Zhihu is providing its educated intellectual users with actually helpful content that adds value to their lives and helps to expand their knowledge through social interactions.

Keep in mind that content marketing takes time and doesn’t just happen overnight. However, compared to faster-paced and short-lived platforms like Weibo or WeChat, content on Zhihu has the potential to last and work in the long term. Besides, Zhihu serves an educational purpose with its in-depth questions and answers, and because users seek answers to evergreen questions.

Get in touch with Tenba Group to redeem your FREE consultation if you are interested in getting support for this with a clear and effective strategy. Don’t miss the power of Zhihu for your China SEO strategy!

Finally, please take a look at our extensive China marketing solutions to learn how to boost your brand in the Middle Kingdom.

The post What is Zhihu? Your B2B Marketing Guide to the Chinese Quora appeared first on Tenba Group.

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How to Find a Freight Forwarder in China for International Logistics https://tenbagroup.com/how-to-find-a-freight-forwarder-in-china-for-international-logistics/ Mon, 16 May 2022 12:45:33 +0000 https://tenbagroup.com/?p=24704 Finding a Freight Forwarder in China can be challenging for international small and medium B2B and B2C enterprises who source their products in the Middle Kingdom. But don’t worry! We are here for you. After having described the process of sourcing products in China and importing goods from China in detail, this Tenba Group article …

How to Find a Freight Forwarder in China for International Logistics Read More »

The post How to Find a Freight Forwarder in China for International Logistics appeared first on Tenba Group.

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Finding a Freight Forwarder in China can be challenging for international small and medium B2B and B2C enterprises who source their products in the Middle Kingdom. But don’t worry! We are here for you.

After having described the process of sourcing products in China and importing goods from China in detail, this Tenba Group article focuses on the logistic aspect when transporting goods from China to their global destination, and in particular on finding and collaborating with a reliable freight forwarder in China.

Without further ado, let’s get started.

Global B2B & B2C Companies: Optimize Your Logistics from China

International B2B and B2C businesses commonly source and import products from China.

Whether dropshipping, Amazon FBA, reselling, white labeling, or creating and manufacturing their own products – global companies can select from a large variety of products when sourcing their products from China to fit their business concept and strategy.

Especially on Chinese platforms like 1688 and Baidu B2B for sourcing your products, manufacturers and suppliers offer good quality to price ratio but focus on producing and selling for the Chinese market. This means that manufacturers and suppliers often don’t have much experience with exporting and shipping goods abroad. As a result, the buyer has to take care of the whole logistics process, including proper packaging and obtaining the required certificates.

On Alibaba, the suppliers are often just retailers or wholesalers who present themselves as manufacturers but are in fact only intermediaries. While they speak English and are experienced with foreign buyers and the process of shipping from China to Australia, Europe, the US, and other international destinations, the prices are relatively high in comparison to Chinese platforms like 1688 and Baidu B2B.

Therefore, buying from Chinese platforms gives global B2B and B2C companies a price advantage, if they can fulfill the freight forwarding aspect themselves.

In Tenba Group’s article on importing goods from China international B2B and B2C businesses find a step-by-step guide on the whole importing process – from making an order to incoterms, selecting a freight forwarder in China, the required shipping documents, and expected costs.

Therefore, this article specifically focuses on the specific aspects of finding and collaborating with a China freight forwarder effectively and efficiently.

What is a Freight Forwarder?

A freight forwarder is a company – or often just an individual agent with an extensive logistics network – who organizes the transport of goods from one destination to another – either by land, sea, or air.

On the other hand, 3PL (third-party logistic) companies are actually larger companies that offer more services compared to a freight forwarder, e.g. procurement and sourcing, export, and customs clearance.

Besides, you may also come across the term NVOCC (Non-Vessel-Operating Common Carrier) company. NVOCCs focus on sea transportation (they usually do not own and operate their own fleet and containers, storage, and distribution centers).

In practice, these terms are often used interchangeably.

How to Find a Freight Forwarder in China

If you are wondering how to reduce shipping costs from China, finding an affordable yet reliable and responsive freight forwarder in China is an excellent way to do so.

Generally speaking, larger reputable logistics companies will be more experienced and reliable than smaller or new companies. However, they may be less flexible and for smaller shipments, it may be more advantageous to collaborate with smaller freight forwarding companies. A freight forwarding agent will be able to advise you on your best options.

Let’s look at the process step by step:

1. Determine your Forwarding Needs

These are the questions you can ask yourself:

  • Is a forwarding agent sufficient or do you prefer to work with a 3PL company to assist you more extensively (e.g. procurement and sourcing, transport from factory to export port, export clearance, transport from destination port to the final destination, inventory and returns management)?
  • What are the goods and volumes you are planning to ship as well as the port of origin and destination?
  • Is this a one-time shipping route or will you require regular forwarding services?

Being clear with your scope will make the process of finding a suitable logistics agent in China for your forwarding needs easier.

2. Aspects of a Freight Forwarder in China to Consider

When choosing a freight forwarder, consider the following aspects:

Industry Expertise

Ideally, you collaborate with a freight forwarding agent who can individually cater to your specific logistics needs and situation. 

You can consider industry experience of the specific goods, key destinations, global setup, and offices near you as well as languages spoken when selecting a freight forwarder.

If you are researching freight forwarding companies on a platform, you can also check their reviews, how long they have been registered, as well as background information on their business.

Risk Management

Global transportation is influenced by a large variety of economic and political factors. Therefore, conditions are prone to change. Your freight forwarder should be knowledgeable and able to plan ahead in order to mitigate risks and handle issues that may occur. 

Larger freight forwarding companies may also have cargo insurance to cover liabilities. Make sure to check this beforehand.

Services Offered

Depending on your requirements of logistics, you may require a combination of shipping methods, storing goods in warehouses, and other logistics solutions. 

Discuss your supply chain needs with prospective forwarders/3PLs to ensure that they can meet your requirements and needs.

Services you may require include freight insurance, pickup and delivery, customs clearance, inspection, (re)packaging and labeling, and warehousing.

Communication & Customer Service

Does your selected freight forwarder speak your language? Do they respond timely, and demonstrate a proactive, transparent, and solution-based approach?

Does the forwarder offer online tracking of the shipped goods, notifications, and customer service for questions and troubleshooting?

Licenses, Certifications, and Permits

Freight forwarders are required to have various permits like import and export licenses to handle cargo, as well as special licenses for carrying sensitive and dangerous goods. 

Ensure that your provider has the appropriate licenses for handling cargo as well as special licenses if your products require this.

3. Where Can You Find a Freight Forwarder in China

Once all questions have been answered and you are confident with your choice of freight forwarding agent or 3PL company, make sure to sign an agreement with them on the deliverable you agreed on with them. Freight forwarding companies typically have standardized contracts, terms, and conditions.

For Express Delivery

Get your quotes directly from the largest CEP providers, e.g. DHL, FedEx, DB Schenker, UPS.

For Land/Sea/Air Transportation

Consult the search engine of your choice or Chinese sourcing/B2B platform (see below). Alternatively, you can also contact a freight forwarding company/agent or 3PL to assist you with this.

  • Google and Alibaba: search for e.g. “freight forwarder in China TARGET COUNTRY”. You can consider both organic search results and ads, but keep in mind that high-ranked organic results are established over time while every company can run ads.
  • 1688 and Baidu B2B: search for e.g. “货运代理” (shipping agent)

Example: searching “货运代理” (shipping agent) on 1688

Example: searching “货运代理” (shipping agent) on 1688
Source: s.1688.com

Example: searching “货运代理” (shipping agent) on Baidu B2B

Example: searching “货运代理” (shipping agent) on Baidu B2B
Source: b2b.baidu.com

Does all of this sound overwhelming? A China expert like Tenba Group can help you with finding and collaborating with a reliable and affordable freight forwarder in China.

To provide a better understanding of the context and current developments, let’s take a look at the global Courier, Express, and Parcel industry (CEP), as well as logistics must-knows from China, and a more detailed differentiation between freight forwarders, 3PLs, and NVOCCs including the global key players.

The International CEP Industry

In today’s global market, fueled by ecommerce growth (and the shortcomings of traditional postal companies), the Courier, Express, and Parcel (CEP) industry is booming. The global ecommerce retail sales are forecast to double compared to 2019 and reach 7.4 trillion USD in 2025. China currently is the largest ecommerce market in the world, followed by the US, UK, Japan, South Korea, Germany, France, and India – all of which have steep growth rates.

With a quick recovery after the Covid-pandemic, the global CEP market size is projected to reach nearly 700 billion USD by 2028 at an average annual growth rate of around 6%.

Let’s first take a look at the definition of each term.

  • courier: short distance deliveries
  • express: delivery within 1-2 days, air shipment (fully/partially)
  • parcel: non-palletized items up to 50 kg (110 lbs), land/sea shipment

Today, these terms are used interchangeably. However, they have fast and reliable delivery in common. CEP companies provide international shipping with a variety of services. The first movers and industry key players are UPS and FedEx (USA), DHL and TNT (Europe), Toll Express (Australia), and SF Express (China).

International and Domestic Shipments

Generally, CEP consists of two business parts: International and Domestic shipping. In particular Domestic shipping has surged in the face of the global ecommerce economy growth. 

The two main service types of CEP are Standard and Express shipping. In particular, standard shipping has grown recently due to the production price pressure that comes with globalization.

Shift from B2B to B2C Clients

In the past, international CEP businesses including Freight Forwarders in China mainly provided their services to B2B companies (urgent high-value low volume orders). To cater to the time-sensitive needs of their clients, CEP companies created extensive networks and invested in their own air fleets to provide fast and reliable services.

Whereas today B2B is still the focus of CEP service providers, more and more B2C companies request the services of CEP companies. As the B2C business model has an exponentially higher number of shipments than the B2B business model, CEP companies had to adjust their services to cater to their customers’ needs. 

Overall, B2C clients are more difficult to reach (multiple delivery attempts) and have higher return rates which result in higher shipping costs. Generally, the weight per shipment is lower in B2C and higher in B2B deliveries.

Traditional CEP companies are required to adjust their services to cater to high volume ecommerce deliveries. This includes IT solutions that link customer orders to suppliers, logistics, and payments as well as last-mile delivery. 

Therefore, CEPs specialized in ecommerce have emerged (e.g. Kiala which has since merged into UPS) and traditional CEP companies like DHL are expanding their ecommerce logistics. The goal is to combine fast delivery with reduced costs for the customers and businesses.

Development of the Logistics and Freight Forwarder Market in China

In Q1/2022, it seemed like the world had recovered from the Covid-pandemic. While most of the world has returned to “business as usual” after the pandemic, China’s strict “Zero Covid” policy still sees lockdowns and factory shutdowns, resulting in production and shipping backlogs and delays.

Rising Energy Prices & Inflation

In the face of rising energy prices and inflation in Western countries, consumers’ demand due to the lack of freely disposable income results in lower demand, which increases logistics costs.

Increased Partnerships/Mergers, Less Competition

More and more freight forwarders in China and third-party logistics (3PL) providers are increasingly entering long-term partnerships or even merging their businesses. While this results in increased capacity and services individual companies can provide, this also reduces competition. 

For example, Kuehne+Nagel recently acquired Apex, and Maersk acquired LF Logistics, both leading freight forwarders in Asia, to increase their logistics services in Asia in the ecommerce, hi-tech, and e-mobility sectors.

This, in turn, generally leads to a more streamlined and less competitive logistics market with higher prices and less flexibility.

Express Delivery Prices Soar

The aforementioned developments also affect express delivery services, which were in exceptionally high demand before the pandemic.

Air Cargo Demand is Booming

While traditionally the ecommerce sector relied on sea shipping, digitalization, customization, and consumer behavior demand a quicker reaction time for B2B and B2C businesses.

Air cargo is projected to increase from 1.3 million tons in 2020 to 2 million tons by 2025. This will require 15 additional freight aircrafts from China every week. This is particularly relevant as due to supply chain disruptions in China which mainly affect land and sea transport (ship waiting line, closed), air transportation is more reliable (albeit more expensive).

Automation in Logistics

With the rapid advance of digitalization and automation, this development is also taking the freight forwarder in China sector by storm.

Innovative logistics companies invest in comprehensive transportation and warehousing management solutions that will automate and ease their processes in the mid to long-term. Cainiao (Alibaba.com) and JD Logistics (by JD.com) are expected to be the first movers with significant industry impact.

For example, in 2019, JD Logistics opened an intelligent-logistics center with a 3D automation system and a single-day processing capacity of 1.6 million orders. And in 2022 JD Logistics introduced a robot to manage the last 100 meters of delivery.

Logistics Must-Knows

We’ll first take a look at the type of containers, then dive into the different shipping methods, before we take a look at Amazon FBA shipping, shipping restrictions, and pallet packing.

Types of Containers

These are the most common standard shipping containers according to their length (external), net weight, and maximum load capacity:

  • TEU – Twenty Equipment Unit: 20-foot containers (6.10 meters), 1.8 – 2.2 metric tonnes net weight (a heavyweight surcharge applies to TEU with a net weight of more than 14 tons), maximum load of 28 metric tons
  • FEU – Forty Equipment Unit: 40-foot containers (12.19 meters), 3.8 – 4.2 metric tonnes net weight, maximum load of 30 metric tons

Both containers have a standard external width of 8 feet (2.44 meters) and a standard height of 8 feet and 6 inches (2.62 meters).

General Shipping Routes of Freight Forwarders in China

This map of the Chinese One Belt One Road Initiative (BRI) shows the main trade routes from China to Europe and Africa by land and by sea. It is based on the original Silk Road map/routes. All modern transportation routes to Europe and Africa are based on these original trade routes.

This map of the Chinese One Belt One Road Initiative (BRI) shows the main trade routes from China to Europe and Africa by land and by sea.
Source: commons.wikimedia.org

Next, let’s look at the general shipping methods of Freight Forwarders in China.

Shipping Methods

With more than 2,000 ports, China is also home to the largest ports in the world. In fact, the top five ports according to TEU volume are Shanghai, Singapore, Ningbo-Zhoushan, Shenzhen, and Guangzhou Harbor.

In fact, Shanghai port is the world’s largest port in terms of 20-foot containers moved. And China COSCO is the world’s largest shipping company with more than 800 vessels.

Every year, Chinese ports export millions of containers, and the top five export destinations from China are the US, Hong Kong, Japan, Vietnam, and the Netherlands.

China’s main export goods include computers, furniture, clothing and accessories, medical tools, vehicles, steel, and toys.

Principally, there are four shipping methods: 

  1. Shipping by Land (Train)
  2. Shipping by Sea (Sea)
  3. Shipping by Air (Air)
  4. Express Shipping (Air)

Let’s take a closer look.

1. Shipping by Land

While transportation by rail is the most affordable method, it is only suitable for continental logistics. It accounts for about 15% of all cargo in China and may continue to grow with the revival of China’s Silk Road.

Land transportation from China is typically by train due to the large distances. Trucks are oftentimes used to transport the goods from the factory to the port or airport of export as well as from the port of destination to the final destination of the goods.

2. Shipping by Sea

This is the most common method of transportation for global B2B and B2C companies that source goods in China. 

Shipping Routes (Sea Shipping)

In general, there are three different routes to transport products that are “Made in China” into the world, via the 

  • Pacific route to America – most direct shipping route from China to the US, Canada, and South America
  • Atlantic route to Australia, Europe, and West Africa
  • Indian Ocean route to Australia, India, Arabia, and East Africa

Here also China’s One Belt One Road Initiative with additional ports and infrastructure will continue to make this process smoother.

Shipping Cost (Sea Shipping)

The pricing depends on the destination, duration, and goods transported, but we have put together general price points (Q2/2022) as an orientation for you.

From China to…20ft container40ft containerDuration
US West Coast13,500 USD18,000 USD14-42 days
US East Coast15,000 USD12,000 USD14-42 days
Australia6,000 USD10,000 USD18-36 days
Germany11,000 USD18,000 USD31-50 days

Take a look at this chart below to see the price development of 40ft containers (FEUs) over the last years (average of all global routes). You can observe that the price of container shipping increased by up to six-fold within just two years.

Source: statista.com

The main reason for these steep price increases is the fragile nature of the global supply chain which observed severe disruptions caused by the Covid-pandemic, the US-Chinese trade war, soaring energy prices, the Russian invasion of Ukraine, the Suez Canal blockage by a large container ship, and other events.

Due to its complexity and transcontinental nature, the shipping industry struggles with port closures and congestions, labor shortages, as well as a lack of new shipping containers.

As the operating costs of container fleets have increased, freight charges also went up. Container ship operators have been reporting record-high profits since the beginning of the Covid-pandemic.

3. Shipping by Air

If you want or must speed up the delivery time, air freight is the transportation of choice. But keep in mind that it comes at a price and has more negative effects on the environment compared to slower sea shipping.

In general, air freight between China and North America (USA, Canada) may take 1-5 days and 3-5 days for Latin America. Normally, air freight between China and Europe takes 3-8 days, and air freight between China and Australia takes 1-5 days

4. Express Shipping

Air express is a D2D (door-to-door) delivery method. While international air freight sends goods to the airport of destination, express shipping also includes the delivery from the airport to the final destination (B2C home or B2B customer warehouse/office).

Express delivery from China to the US can take as little as 1-5 days, 4-5 days to Europe, and 3 days to Australia.

To sum it up, if you are wondering how long shipping from China takes, this depends on the final destination and method of transportation. It can take anywhere from a few days to a few weeks. Keep in mind the Chinese holidays and festivities when planning your logistics process.

Shipping Directly to Amazon Warehouses for Amazon FBA

If you have an Amazon FBA ecommerce business, you can also ship your products directly from the supplier/manufacturer in China to the designated Amazon warehouse. 

Fulfillment by Amazon (FBA) allows you to store your products in Amazon’s warehouse and distribution centers until they are sold using Amazon’s own logistics. 

freight forwarder in china

Here are three things to consider in this process to ensure your cargo gets delivered, safely, on time, and cost-effectively.

1. FCL vs. LCL Shipping

Regardless of land or sea shipping, forwarders differentiate between FCL (Full Container-Load) and LCL (Less-than-container Load).

FCL refers to goods from a single shipper occupying the entire container, which is typically more secure than LCL (lower risk of damage, theft, or loss as less handling of goods is required).

On the other hand, LCL shipping is when container loads are filled by multiple orders or goods. This typically is more economical but exposes your freight to additional risks (see above).

2. Packaging and Labeling

Products that are sent to Amazon FBA must be correctly labeled in accordance with Amazon’s barcode system (Universal Product Code/UPC or FBA label). Also, check that you meet the packaging dimensions of Amazon to avoid rejection of your delivery at the warehouse.

3. Consider Cargo Insurance when Collaborating with a Freight Forwarder in China

Larger forwarding/3PL companies may have cargo insurance included in their shipping terms. Make sure to check this explicitly and also if any stage of your forwarding route may require this, including Amazon.

Shipping Restrictions

General shipping restrictions from China to the world include goods of unusually high value, biological substances, human and animal specimens, dangerous goods, firearms, and weapons. 

Depending on the country of import and destination, further restrictions may apply. While it may be strictly forbidden to export/import certain products, other goods may require special certification and documentation.

Pallet Packaging

To protect your cargo, robust boxes are ideal. Heavier boxes should be backed at the bottom while lighter boxes should be stacked at the top. 

For sea, land, and air transportation, portable pallets are used for additional protection of the freight. Boxes should be stacked aligned on the pallet and shouldn’t overhang. Generally, there are wooden and plastic pallets.

The standard pallet size is also called GMA pallet. The size is 48×40 inches (1.2×1 meters) and it holds up to 4,600 lbs. (2.1 tons). The GMA pallet net weight is 37 lbs. (17 kg).

For international shipping, your pallets should be wrapped and labeled. Shipping and consignee labels for your individual cargo, departure, and destination location are required. You also need to clarify with the supplier if it’s necessary for them to add certain labels, e.g. “do not double stack,” “top load,” and “sensitive items.” 

Chinese Freight Forwarder vs. 3PL

First of all, there are freight forwarding, NVOCCs (Non-Vessel-Operating Common Carrier), and 3PL (third-party logistic) companies. They mainly differ in terms of service. 

A Chinese freight forwarder or Chin esefreight forwarding agent is a part of the TSL industry (Transport, Forwarding, Logistics) that specializes in moving goods between two locations. Oftentimes, a freight forwarder is just one person (agent) with a large network so they can compare many offers, prices, and terms. Based on their extensive experience, they can advise their customers regarding their best option.

On the other hand, a 3PL is an expert in managing logistics needs extensively, and therefore typically offer more services than a freight forwarder. This normally also means that the services of a 3PL are more costly than those of a freight forwarder.

A freight forwarder and 3PL can be the same person/company and the terms are sometimes used synonymously. Typically, their services differentiate as follows:

ServiceFreight Forwarder3PL
Procurement and sourcingx
Planning and organizing the necessary means of transportxx
Handling of goods that require special treatment, e.g. storagexx
Packing goodsxx
Storing goodsxx
Completing required documentsxx
Contracting cargo insurancexx
Transport from the factory to port of exportx
Export clearancex
Customs clearance (import)x
Product trackingxx
Transport from destination port to the final destination of the customerx
Inventory and returns managementx

NVOCCs focus on ocean transportation and usually do not own and operate their own ships/vessels and containers. They also don’t have their own storage warehouses or distribution centers. Likewise, freight forwarders in China typically do not own their transportation equipment, but they often own or lease warehouses for the storage of goods.

Supply Chain of Freight Forwarders in China

Transport from the production site to warehouse → export clearance → inspection of goods → transport to port / forwarding site → shipment to the country of destination → import clearance → storage of goods in warehouse → transport of goods to final destination.

The responsibilities of each step depend on the Incoterms you have agreed on. Typically, the first and last stages are not the responsibility of the forwarding agent.

Largest Freight Forwarders

Now, let’s take a closer look at the largest freight forwarders, which all offer 3PL services.

  • Kuehne + Nagel (Germany): largest sea freight and air freight forwarder worldwide; almost 1,300 destinations in 106 countries worldwide
  • Sinotrans (China): one of the largest logistics and freight forwarder company in China
  • DHL Global Forwarding (USA): leading logistics provider connecting 220 countries/territories worldwide
  • DSV Global (Danish): operates in 80 countries
  • DB Schenker (Germany): connects more than 140 countries in the world
  • Expeditors (USA): operating in more than 100 countries around the world
  • Damco/Maersk Logistics (Netherlands): operating in 130 countries worldwide
  • UPS (USA): offers its services in more than 200 countries/territories around the world
  • Toll Group (Australia): operating in 25 countries worldwide

We’ve created an overview of the largest freight forwarding companies according to the number of TEU (twenty equipment unit containers) moved in 2021

As freight forwarders and 3PLs often do not own their own vessel fleet (but lease warehouses and distribution centers), they collaborate with shipping companies like A.P. Moller-Maersk (the largest shipping company with more than 300 own vessels) and the Mediterranean Shipping Company (with more than 200 own vessels) to charter vessels.

freight forwarders in china
Source: statista.com

This brings us to the end of this extensive article on finding and connecting with freight forwarders in China.

Finding a Freight Forwarder in China – The Takeaway

If you are a global B2B or B2C company requiring shipping from China to the US, Europe, or other parts of the world, you require a reliable freight forwarding company or agent.

Do your due diligence when selecting a freight forwarding agent or 3PL to ensure cost-effective services and on-time delivery of your goods from China. This includes considering your product group, transportation route, forwarding method, and a variety of other aspects.

Finding a freight forwarder in China for express delivery (via air to the final destination) is best done via the largest CEP providers like DHL, FedEx, DB Schenker, UPS, and the likes.

Standard transportation via land, sea, or air (to the port/airport of destination) can be found through Google or Alibaba by searching for “freight forwarder China” in combination with your target country. Alternatively, you can search for e.g. “货运代理” (shipping agent) on 1688 or Baidu B2B.

finding a freight forwarder in china

The China specialists at Tenba Group are happy to connect you with reliable freight forwarders in China. Get your FREE consultation today and take a look at Tenba Group’s additional China marketing solutions.

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Importing Goods from China https://tenbagroup.com/importing-goods-from-china/ Wed, 27 Apr 2022 14:29:30 +0000 https://tenbagroup.com/?p=24574 Importing goods from China is a common practice for B2B and B2C companies around the world. Whether you source goods from wholesale platforms like Alibaba or manufacture your own products – after making a purchase, you need to get the goods to their designated destination. In this article, Tenba Group navigates you through the importing …

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Importing goods from China is a common practice for B2B and B2C companies around the world. Whether you source goods from wholesale platforms like Alibaba or manufacture your own products – after making a purchase, you need to get the goods to their designated destination.

In this article, Tenba Group navigates you through the importing process as part of international trade, so you are well prepared and avoid pitfalls along the way.

Discover everything you need to know about applicable compliance and certificates, logistics and forwarding documents, as well as customs and taxes when importing goods from China.

Let’s take a look at the process step by step.

Overview of Importing Goods from China

Generally speaking, it is advisable to start as early as possible with the sourcing and importing process. Especially if this is a first-time import shipment or new collaboration with a manufacturer or supplier in China, extra time is required to negotiate terms, check certifications, conduct product tests in approved labs, and prepare required shipping and other documents. 

Keep in mind important national holidays, like Chinese New Year, and the time before and after that, to ensure you get your goods in time. Calculate 3-6 months for the whole sourcing and importing process.

B2C and B2B businesses that source and import products from China, generally follow these seven steps:

  1. Sourcing Your Products
  2. Compliance & Background Check
  3. Sample Ordering  & Supplier Selection
  4. Placement of Actual Order & Payment 
  5. Production & Quality Inspection
  6. Shipment & Delivery
    1. Select a Forwarder & Incoterms
    2. Shipping Costs
    3. Shipping Documents
  7. Monitoring the Delivery Process & Arrival of Goods & Final Check

Read up on everything you need to know about importing from China, so this process will be quick, smooth, and efficient for your global B2B or B2C business.

1. Sourcing Your Products

Finding products in China is easy and difficult at the same time. There is an abundance of suppliers, manufacturers, and agents who are eager to do business with international companies. 

This is also a challenge at the same time: the sourcing situation is confusing, and without good Chinese language skills, you often enter a dead-end in the negotiation process. Read up on everything you need to know about sourcing products from China in detail here.

Alternatively, a China expert like Tenba Group can help you with this crucial step to source and import products from China for your B2B or B2C business. Our sourcing service includes supplier/manufacturer research including background checks, communication/facilitation, and our recommendation based on extensive market knowledge and expert insight.

2. Compliance & Background Check

First of all, before beginning collaboration with a new supplier to start importing goods from China, it is advisable to conduct a background check on the potential partner.

You can check supplier reviews and transaction numbers if you are using a platform like Alibaba and find out more about the supplier on platforms like Aiqicha that list registered capital and other relevant information, e.g. how long has the company been registered. This also helps you to identify if the potential partner is actually a manufacturer or only a broker/retailer who has their own margin.

Next, make sure that the product fulfills all regulations and has all certificates required for the countries of import and final use. These regulations and certificates are typically centered around consumer health and safety (e.g. foods, children’s goods, consumer electronics). In case your potential supplier/manufacturer doesn’t have these, don’t panic. It just means extra time is required to test the products and get the required certification.

The most recognized Quality Management System (QMS) standard in the world is ISO 9001. It is a certification for suppliers/manufacturers to demonstrate they have good management processes and policies in place and are continuously improving these.

For textiles and leather products that are in touch with human skin, Oeko-Tex certifies human-ecological safety in all stages of production. While Oeko-Tex is not a legal import requirement, it is an important seal and decision support for consumers. It also contributes to protecting suppliers against potential legal obligations should consumers claim skin irritation or injuries related to the product.

Besides, every country has different regulations on the labeling of products and packing. So make sure to check this with your potential supplier as well.

The most common certificates for the EU are the CE mark, the REACH certificate, RoHS for electric and electrical equipment, as well as the EU declaration of conformity.

  • The CE mark (Conformitè Europëenne) is mandatory for more than 20 product groups, including toys, and mobile phones.
  • When using chemicals, products must comply with the EU REACH regulation (Registration, evaluation, Authorisation, and Restriction of Chemicals) to protect human health and the environment.
  • RoHS (Restriction of Hazardous Substances in Electrical and Electronic Equipment) regulates the use of dangerous and harmful substances in electrical and electronic equipment to protect the environment and general public health.
  • EU declaration of conformity: An EU declaration of conformity does not mean the goods are legally compliant or marketable in the EU. The product must still comply with other EU/national regulations to fulfill legal conformity. However, depending on different directives and regulations, various product groups require a declaration of conformity, including medical devices, electric appliances, and personal protective equipment like FFP2 masks.

For the United States, the U.S. Customs and Border Patrol (CBP) offers comprehensive information on permits and/or licenses you may require. For example, all children’s products must comply with CPSIA (Consumer Product Safety Improvement Act) when importing this product category from China to the US. And food items must comply with the FDA regulations in the US.

If the supplier/manufacturer of your choice does not yet have the required certifications for your product, they will collaborate with test/certification institutes (laboratories) in China to obtain the respective certificates. The China experts at Tenba Group can connect you with certified test labs for your specific product group and needs.

Keep in mind that this process can take several weeks and the original product might have to be adjusted to fulfill the required standards. Typically the buyer pays for this product certification if a supplier/manufacturer doesn’t have it yet.

3. Sample Ordering & Supplier Selection

Depending on the supplier/manufacturer background check, product description, and pricing, it is now time to order your samples.

After you have received all samples, assessed, and tested them in practice, choose the supplier/manufacturer with the best quality and price.

4. Placement of Actual Order & Payment

Once you know that the goods you are attempting to import into your country are legal to do so and have the required certifications, you can proceed with the purchase process. Make sure that the terms and conditions from the PI are still valid, place your order, and request the final commercial invoice, which you will need later on for the shipping process.

Place your order and pay for the products. Keep in mind that suppliers/manufacturers generally request 100% payment before proceeding with the manufacturing and shipping of your order. There are also solutions that require no prepayment or down payment. The China specialists can connect you with reputable brokers that offer these services.

This is where the background check of the supplier from the Compliance & Background Check comes in handy, so you don’t have to worry about unreliable suppliers/manufacturers. For larger orders, you can consider setting up an escrow account or using Alibaba Secure Payment (Escrow) or Alibaba Trade Assurance – if the supplier is on Alibaba.

Bank & FX Fees (Importing Goods from China)

It is advisable to clarify with your bank beforehand if and at what cost and time period they can transfer payments to China. 

Some Chinese manufacturers have subsidiaries in Hong Kong to make it easier for international purchasers in Europe, the US, and other third countries to make their payments. Also, consider the currency exchange rate and additional costs that may apply when paying in a foreign currency.

Chinese New Year & Other National Holidays

Also keep in mind the time before and after important Chinese national holidays like Chinese New Year that typically result in delays, a decline in product quality, and other issues. 

5. Production & Quality Inspection

After the payment arrives at your supplier/manufacturer, your order is processed. The goods are either manufactured if they are custom-made or prepared for shipping if you’ve selected an existing product.

Once the goods are ready, a quality inspection (QI) at the supplier/manufacturer by an external company that checks whether the goods are ready for shipping is advisable for larger orders. A China expert like Tenba Group can help you to organize this.

6. Shipment & Delivery (Importing Goods from China)

So, you’ve successfully sourced and manufactured your products in China from a reliable partner and are in line with all compliance requirements. Now, all you’ve got to do is get the goods to your warehouse or office. If you are new to this process, it can be very complex, confusing, time-consuming, and costly. 

This can easily consume your expected margin due to unexpected customs, import, delivery, and regulatory expenses and cause customer dissatisfaction due to longer transit times and other unexpected delays.

Take these simple and straightforward steps to get through the process of importing goods from China timely and smoothly.

a. Select a Forwarder & Incoterms

Depending on your budget and the time frame, you can choose from a variety of shipping options like air, sea, truck, or train. Typically, the slower, the cheaper and easier the transportation is.

When selecting a forwarder, also make sure that they are reputable and experienced with the logistics of exporting your product category from China and importing it into your country. In case you are unsure, a China expert like Tenba Group can help you with a background check.

The International Commercial Terms (Incoterms) are also known as shipping terms, freight terms, or trade terms that determine which parties are responsible for the shipment at any given point during the transit. 

This typically includes loading and unloading of the goods, import and export customs clearance, export and import taxes, audits, and transportation of the goods to the final destination.

The total landed cost is therefore determined by the type of forwarding you choose, e.g. ex works, delivered duty paid, or any other of the list above.

importing goods from china: incoterms

Knowing your landed costs keeps you in the driver’s seat of your margin and earnings. In some cases, you may only know an estimate before your shipment has arrived, but not the full final costs. Consider leaving a small margin for any unexpected fees and costs that may occur, especially as you go through the importing process for the first time.

The most common Incoterms are:

EXW (ex works)

You are responsible for organizing transportation from the location of the manufacturer to your warehouse or office. On the other hand, you have full control over this process and it is less expensive overall.

You collaborate with a freight forwarding company for the logistics process. Among the largest forwarders according to their gross revenue are DHL, Kuehne + Nagel, DB Schenker, and DSV Panalpina.

FOB (Free On Board)

Also known as “Freight on Board”, FOB indicates that the seller is responsible (cost, handling) for all steps and costs related to the point of loading the goods into the vehicle that was chosen as the mode of transport (ship, truck, airplane).

DDP (Delivered Duty Paid)

The seller pays and arranges transportation to your selected destination (including customs). This is very comfortable, but also more expensive, and you generally have less control over the process.

If you want to save time and energy, consider working with a third-party logistics provider (3PL), who takes care of the whole fulfillment process for you.

b. Shipping Documents & Costs

If you decide to manage the logistics process – partly or in full – on your own, take a look at the next steps. 

Keep in mind that getting the respective certificates and supporting documents can require a few or several working days. Get started with this process timely to avoid delays and other issues. Even more so around important national holidays.

Rate of Duty

To find out the rate of duty that will be applied to your goods, select the international customs tariff classification number (HS Code). This 10-digit together with the Certificate of Origin (C/O or CO) determines the applicable duty rate.

Make sure to always check official government information. For example, you can check the HS Code for the US here. Besides, you can find an official CO template for the US here. You will typically have to collaborate with the manufacturer and forwarder to complete the Certificate of Origin.

The HS Code will determine the applicable tax rate. Your supplier/manufacturer typically can give you a recommendation based on their experience to save duty taxes (e.g. if a product can be assigned to several HS codes, you can choose the one with lower duty taxes).

In the EU, you will also need an EORI number (Economic Operators Registration and Identification number), which is an operator identification number that is valid throughout the European Union.

Land Cost 

The land cost is all expenses related to shipping your product like taxes and fees. 

Export & Import Duties & Taxes

Generally, the customs fee includes the declaration, cost, and time period to process your goods and shipment. If any documents are missing or not filled out correctly, lengthy delays may occur. 

China imposes export taxes of up to 13% on more than 1,000 products and up to 9% on almost 400 products. This applies to steel products, for example. Keep in mind that Chinese government policies may change frequently and at short notice.

The import tax rate is determined by the country you are importing the goods to, the type of products, and whether or not there are any Free Trade Agreements between the countries.

  • US: 0%-37.5% import tax; 14 FTAs (excluding China)
  • EU: 19% import VAT rate (7% on selected goods like food, books); 45 FTAs (excluding China); according to the 2021 EU tax update, since 1 July 2021,
    • all shipments arriving from outside the EU are applicable to VAT regardless of their value
    • you can choose to close your foreign business VAT registration and file eligible intra-EU sales to consumers through one OSS VAT return
    • marketplaces are responsible for collecting VAT from their customers and paying it to the respective authorities
  • Japan: 10% (standard tax rate) or 8% (reduced tax rate); 21 FTAs (including China)
  • Canada: 5% Goods and Services Tax (GST); 15 FTAs (including China)
  • Australia: 5% Goods and Services Tax (GST); 15 FTAs (including China)

Make sure to truthfully and fully declare all information required in any supporting documents. This typically includes the country of origin, the destination, the type of goods, their quantity, and their value.

Further Shipment Expenses

Additional expenses related to the shipment may occur. They vastly vary between forwarding providers and can include container fees, packaging costs, terminal handling charges, broker fees, as well as other direct and indirect costs.

c. Shipping Documents

Together with the supplier and freight forwarding company, make sure that all required shipping documents are filled out completely and correctly, stamped, and ready for use.

Import documents, depending on your shipment terms, can include

  • Indent: list of items to be imported (duplicate or triplicate)
  • Commercial invoice: must include country of origin, purchase price, tariff classification, etc. 
  • Packaging list: with details on the products to be imported
  • Arrival Notice: provided by the freight agent
  • Bill of Lading (BL): issued by a carrier to a shipper that details the type, quantity, and destination of the goods being carried
  • Bill of Entry (BE): filed by customs clearance agents or importers on or before the arrival of the imported products
  • Letter of Credit (LC): document from a bank/financial institute that guarantees that a seller will receive the buyer’s payment in time and in full
  • Bill of Sight (BS): customs declaration by an importer who is unsure about what is shipped; it allows an importer to inspect the goods before paying duties
  • Dock Challan: after all formalities of customs are completed then dock charges must be paid
  • Dock Warrant: to certify that the holder is entitled to goods imported and warehoused in the docks

Depending on the forwarding method, you, the supplier, the forwarder, or the third-party forwarding company are responsible to compile these documents. Regardless of whose responsibility it is though, you are required to – and it is also in your best interest – to cooperate timely and well to get all documents ready.

Special Requirements for the US: Importer Security Filing (ISF)

The ISF or 10+2 is a document that provides information about your shipment to the US. You must file it to the U.S. Customs Office in advance the day before your shipment leaves the port in China. 

Without this document, you may be subject to a large fine. The U.S. Customs and Border Protection office has more details on this.

After your commercial goods have arrived at the destination port, you have five days to submit further required documentation. These must be accepted by the CBP before you file the Bill of Lading, packing list, commercial invoice, certificate of origin, customs bond, delivery form, and further requested documentation.

Expert Tips to Speed Up Customs Clearance

  • Follow instructions by official authorities with attention to detail
  • List the required information clearly and systematically
  • Describe the exact quantity of each item of goods per box/package
  • Label each box/package clearly and refer to them in your supporting documents

Keep in mind that this is in your best interest to make the importing and customs agents’ job as easy as possible. Prepare yourself to troubleshoot extensively, especially during the first time you are going through this process.

7. Monitoring the Delivery Process & Arrival of Goods & Final Check to Complete Importing Goods from China

Ask the supplier or forwarder for a tracking number to know where your shipment is at all times and to prepare your warehouse for the arrival accordingly. 

Allow time for international shipment, but don’t hesitate to call and follow up, in case your goods seem to be stuck somewhere or information in the tracking system is missing. A simple call can often clarify any misunderstandings often related to incomplete or unclear documents. 

On average, goods shipped from China by sea take around two weeks to reach the US West Coast and around one month to reach the East Coast. The recipient is normally notified before arriving at the port of entry, nonetheless, we recommend keeping an eye on the tracking portal. 

Once your goods are imported, there is one last step we recommend.

After you receive the goods, it is advisable to do a check for completeness and quality right away. This is because manufacturers typically only process claims within a short period of time.

As a courtesy, and to maintain a good business relationship with your Chinese supplier, give them a positive online review if you were satisfied with their service. They will certainly appreciate this. In case you were not satisfied, it is advisable to raise concerns in private (not publicly) and very tactfully and delicately.

Importing Goods from China – The Takeaway

Sourcing goods from China is a common practice for B2B and B2C companies around the world. Depending on the time, energy, and budget you are willing to invest, you can hand over the process of sourcing and importing goods from China including compliance (or only individual aspects) to a third-party fulfillment provider or take care of the process on your own.

If you choose to manage the logistics process, be prepared that it may be complex, especially if you are doing it for the first time and/or with a new supplier. Make sure to follow the steps outlined in this guide to avoid common mistakes and pitfalls, and, most importantly, to be aware of the time and money it will require to get your goods from China to your warehouse or office.

importing goods from china - step by step guide

Would you like a helping hand with importing goods from China? Contact Tenba Group for your FREE initial consultation.

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China Outbound Real Estate Investment – A Comprehensive Data Report https://tenbagroup.com/china-outbound-real-estate-investment/ Wed, 23 Mar 2022 14:43:11 +0000 https://tenbagroup.com/?p=24191 China Outbound Real Estate Investment is a trending attractive way for China’s HNWI to live a luxurious lifestyle with a foreign residency, manage their wealth, and provide education and lifestyle opportunities for their families. This Tenba Group article provides insightful information for international immigration companies and real estate agents who assist their Chinese HNWI clients …

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China Outbound Real Estate Investment is a trending attractive way for China’s HNWI to live a luxurious lifestyle with a foreign residency, manage their wealth, and provide education and lifestyle opportunities for their families.

This Tenba Group article provides insightful information for international immigration companies and real estate agents who assist their Chinese HNWI clients to purchase real estate abroad for investment, citizenship, and to upgrade their lifestyle.

While investment immigration slowed down, like everything else, during the Covid pandemic in 2020/21, the buying spree of China outbound real estate investors is gaining momentum again in 2022.

China Outbound Real Estate Investment

With the findings from this article, international real estate and immigration agents, companies, platforms, and developers can

  • optimize their online content for Chinese search engines to increase their exposure impactfully
  • run targeted Baidu PPC ads to generate leads
  • reach their target audience with influencers in their industry
  • assess potential partners in China and the Greater China area (Singapore, Macao, Taiwan, Hong Kong) for collaboration to reach, convert, and serve Chinese prospective clients at optimum

But first, we’ll take a look at why Chinese HNWIs move abroad in the first place and their favorite destinations to expatriate. Then, we’ll examine the main competitors (Chinese agencies and platforms) for real estate and investment immigration-related keywords on the first Baidu SERP. Finally, we’ll show you how to reach Chinese HNWIs who seek investment immigration.

Now, let’s get started.

1. Reasons for Chinese Citizens to Expatriate

China’s 1.4 billion population is getting wealthier and wealthier. Chinese HNWI choose attractive countries around the world for themselves and their families to upgrade their lifestyle and expand their opportunities in the professional, educational, or health area as well as to gain access to attractive overseas destinations and their benefits, as the European Union. 

Whether to manage their wealth (lower taxes abroad, better investment opportunities, etc.) or provide their children with excellent higher education – the booming Chinese middle class is seeking attractive foreign socio-economic opportunities.

At the same time, local conditions may drive Chinese HNWIs to seek their luck elsewhere. This may include political reasons, prosecution of minorities, lack of freedom of expression, the handling of Covid, increasing real estate prices, and access to independent information.

Just keep in mind that, unlike many countries, China does not allow dual citizenship. However, as Chinese are typically very patriotic, most HNWIs are interested in foreign residency (Golden Visa) over foreign citizenship (Golden Passport). At the same time, with the Chinese government starting to tax overseas Chinese, foreign citizenship could become more interesting for Chinese HNWIs. 

On the other hand, Golden Visa investment immigration schemes provide temporary short- or long-term residency in the destination of choice. However, this doesn’t affect the citizenship/passport. In the EU, Cyprus, Greece, Malta, and Portugal are the favorites among international HNWIs, retirees, and entrepreneurs.

Overall, China has moderate taxation. The individual income tax is progressive with rates between 3% and 45%. Individuals who reside in China for more than 183 days are taxed on their worldwide earned income. At the same time, China has signed over 100 double taxation agreements. At an effective rate of 15%, the corporate tax in China is below the global average.

Demographics of Overseas Chinese Communities

To begin with, let’s take a look at the countries with the most Chinese expats (2020). We have then selected the most popular investment immigration destinations based on online visibility, keyword volumes, and social media relevance, on which we will focus on these countries in this article:

CountryChinese expats
Thailand7 million
USA5.4 million
Singapore3 million
Canada1.9 million
Australia1.4 million
United Kingdom500.000
Spain300.000
New Zealand300.000
Greece130.000
Germany150.000
Portugal25.000
Turkey19.000
Cyprus1.000
Malta600

With its relative proximity and Asian lifestyle, Thailand is among the favorite overseas Chinese communities. Chinese emigrants prefer Malay-dominated provinces in the South as well as Bangkok and Phuket.

China cross-border investments

The United States of America are clearly another favorite among Chinese expats. First and foremost, wealthy Chinese appreciate the educational opportunities and the living environment in the United States. New York (865,000 expats), Los Angeles (678,000 expats), and San Francisco (582,000 expats) with their iconic Chinatowns are home to the majority of these immigrants. In fact, New York is home to the largest Chinatowns in the world.

Much more than a tourist destination for a night out or some street food, Chinatowns in the USA are vibrant neighborhoods where Asian communities maintain their rich culture, heritage, and identity. Oftentimes, there are also temples, museums, and other Chinese points of interest.

Finally, Singapore is a hotspot for overseas Chinese communities as Mandarin Chinese is one of the four official languages of Singapore along with English, Malay, and Tamil. Besides, 74% of Singapore’s 5.5 million population are of Chinese descent, 14% are Malays, 9% are Indians, and 3% have other roots. There are two Chinatowns in Singapore with ample food stalls, souvenir shops, bars, and cultural institutions.

2. Country Overview of China’s Top Emigration Countries for China Outbound Real Estate Investment

Now, let’s get an overview of China’s favorite expat destinations in terms of cost of living, taxes, and real estate (buying and rental).

Cost of Living Comparison

For the cost of living, we’re referring to the latest findings from WorldData. A total of 109 countries have been ranked. Bermuda on rank 1 is the most expensive while Angola on rank 109 is the least expensive. The cost index is compared to the USA (100). So, for example, in China, goods of daily life are 40% cheaper compared to the USA. 

CountryCost IndexWorldData RankAverage Monthly Income
Australia108.1144,474$
Malta105.9n.a.1,927$
New Zealand105.1173,463$
United Kingdom100.3193,319$
USA100205,378$
Singapore98.7324,577$
Germany88.9263,956$
Cyprus86.3n.a.2,109$ 
Spain81.1292,280$
Canada74.8213,632$
Portugal74.4341,816$
Greece73.4351,494$
China61.341879$
Thailand40.673587$
Turkey36.982754$

Next, we’ll examine the situation around taxes in the selected target countries.

Taxes Comparison

In terms of taxes, we’ll take a look at the personal income tax, corporate tax, rental income tax, and the number of double taxation agreements.

CountryPersonal Income TaxCorporate TaxRental Income TaxDouble Taxation Agreements
China3%-45%15%10%-20%100
Thailand0%-35% (150,000 THB ~ 4,500$ tax exempt)20%12.5%61
USA10%-37%21%taxed with personal income tax58
Singapore0%-22% (20,000 SGD ~15,000$ tax exempt)17%0%-20%98
Canada15%-33%15%taxed with personal income tax94
Australia0%-45% (18,200 AUD ~ 13,500$ tax exempt)30%taxed with personal income tax45
UK0%-45% (5,000 GBP ~6,500$ tax exempt)19%taxed with personal income tax130
Spain19%-47%25%taxed with personal income tax93
New Zealand10.5%-39%28%taxed with personal income tax40
Greece9%-44%24%11%-33%57
Germany0%-45% (10,000€ ~11,000$ tax-exempt) + solidarity surcharge15% + 15% trade taxtaxed with personal income tax96
Portugal14.5%-48%21%28%52
Turkey15%-40%25%taxed with personal income tax86
Maltalocal income: 35%, foreign income: 15%35%15%70
Cyprus0%-35% (19,500€ ~21,500$ tax-exempt per person per year)12.5%taxed with personal income tax + SDC (0% for non-dom) and GeSY (2.65%)65

Finally, we’ll take a look at property prices and estimated real estate return of investment (ROI).

Property Prices & Real Estate ROI Comparison

Regarding property prices, we’re referring to the 2022 data on Numbeo. 112 countries have been ranked with Ghana being the least expensive country and Saudi Arabia being the most expensive one. The price-to-income ratio assesses purchased apartments for their affordability (the lower the better). 

Besides, we’re taking a look at the price per square meter to buy an apartment in the city center and the price per square meter to buy an apartment outside the city center, based on the latest Numbeo data.

CountryNumbeo RankPrice to Income RatioPrice/Sqm to buy an apt. in city centerPrice/Sqm to buy an apt. outside city centerEstimated Real Estate ROI*
USA1103.964,520$2,162$7% 
Cyprus1036.42,079$1,480$7% 
Australia977.25,509$3,819$5%
Canada967.546,990$4,992$3%
New Zealand927.965,048$3,627$4%
Spain848.783,221$1,983$5%
UK838.865,059$3,861$4%
Germany828.937,221$5,142$3%
Greece7410.122,085$1,758$4%
Turkey7210.27866$540$6%
Portugal5212.253,080$2,140$5%
Malta4713.113,673$2,651$5%
Singapore2117.4919,528$9,218$2%
Thailand1621.742,870$1,589$1%
China1029.0410,847$6,039$1%
Source: numbeo.com (June 2022)

* ROI = rental price per year (1-bedroom apartment in the city center) / purchase price (for a 60sqm apartment in the city center based on the Numbeo cost of living overview per country)

Now, before we take a deep dive into the Baidu keyword data and acquisition of China outbound real estate investment partners, let’s take a look at what the Chinese government has to say about this.

3. Restriction of Chinese Overseas Investments

As you probably know, the Chinese government keeps close tabs on the activities of its citizens and businesses.

Institutional Restrictions

In 2017, China published the Guidelines on Further Guiding and Normalizing the Directions of Outbound Investments. Outbound Chinese investment must be registered with the NDRC and MOFCOM for “approval and filing regime”. Outbound investments are categorized into “encouraged”, “restricted” and “prohibited”.

Encouraged are outbound investments that

  • contribute to the implementation of China’s “One Belt, One Road” initiative
  • upgrade China’s technical standards
  • create research and development institutions with overseas high-tech enterprises
  • contribute to oil and gas extraction
  • benefit China’s agriculture, forestry, fishery, or animal husbandry

Restricted are outbound investments

  • in sensitive countries or regions
  • in certain industries like real estate, hotels, cinemas, entertainment, and sports clubs
  • that establish equity investment funds without specific industrial projects
  • with outdated manufacturing equipment
  • in violation of the host country’s environment, energy, and security standards

Prohibited are outbound investments that

  • are related to China’s military technology and products
  • have been banned from export (technologies, crafts, products)
  • are in the gambling and pornography sector
  • endanger national security or national interest

Encouraged outbound investments may benefit from tax, insurance, customs, and other benefits and incentives, while restricted outbound investments will be closely examined by the Chinese government.

Individual Restrictions

The following restrictions of Chinese investments, including China outbound real estate investment, are relevant for individual HNWIs and investors interested in getting a Golden Visa.

Capital Controls

Restricting domestic households from investing abroad keeps funds within Chinese borders. This “closed” capital account policy means that companies, banks, and individuals in China cannot move funds freely in or out of the country unless it abides by strict foreign exchange rules. To date, individuals may only transfer or exchange up to 50,000USD per year. 

No Dual Citizenship Allowed

Unlike many other countries, China does not allow dual citizenship. If a Chinese citizen accepts foreign citizenship, for example, through the Golden Passport through the real estate investment route, they have to be ready to give up their Chinese citizenship.

As Chinese are normally very patriotic, most investors are interested in foreign residency (Golden Visa) rather than foreign citizenship (Golden Passport). However, with the Chinese government starting to tax overseas Chinese, foreign citizenships could gain relevance for Chinese HNWIs.

A China expert like Tenba Group can help you to navigate any uncertainties regarding restricted Chinese outbound investments, and to clarify your investment with the Chinese authorities.

4. Baidu Keyword Research for China Outbound Real Estate Investment

Nowadays, research typically starts with a search engine – Baidu in China and Google in the rest of the world. Therefore, we’re kicking off the China outbound real estate investment exploration with China’s most popular search engine Baidu.

Below you will find the search volumes for the most relevant China outbound real estate investment terms for the top Chinese emigration countries as of 23 February 2022, based on the Baidu Keyword Research Tool

The higher the monthly search volume, the larger the potential reach among Chinese online users. The higher the CPC (cost per click of a paid ad), the more competition of other agencies and companies for a specific keyword.

To get an overview of the attractiveness of a country for Chinese online users, we first take a look at the search volume of each target country. This just gives an overview of the general awareness of a country among people who start their online research.

  1. the target country
  2. immigration to the target country (general)
  3. studying in the target country

Secondly, we’ll examine investment immigration and real estate keywords for the target countries, where we also shed a light on the main competitors (agencies, platforms) that can also be acquired as partners.

  1. immigration to the target country (investment immigration)
  2. Real estate in the target country

We have always selected the keywords with the highest search volume, which is why the keyword phrases may not be identical. For example, 想移民加拿大 (want to immigrate to Canada) has a significantly higher search volume compared to 加拿大移民 (Canada immigration).

I. Target Country

Unsurprisingly, large Western countries lead this list when choosing a general keyword.

RankCountry/Keyword (Chinese)Country/Keyword (English)Monthly Search Volume on BaiduCPC in RMB for Baidu
1美国USA736,0200.32
2加拿大Canada403,2860.32
3英国UK382,1431.24
4马耳他Malta341,5470.46
5澳大利亚Australia336,2031.93
6新加坡Singapore335,3300.32
7德国Germany299,4030.32
8新西兰New Zealand215,9240.48
9土耳其Turkey206,0390.32
10泰国Thailand193,3130.32
11希腊Greece174,2220.32
12西班牙Spain151,5620.32
13塞浦路斯Cyprus87,3170.32
14葡萄牙Portugal85,5430.32

Next, we examine the investment immigration search volume, starting with a general keyword.

II. Immigration to the Target Country (General)

This keyword overview to the target country is still rather general and doesn’t include HNWIs and real estate investors as the target audience as everyone can research moving to another country.

RankCountryKeyword (Chinese)Keyword (English)Monthly Search Volume on BaiduCPC in RMB for Baidu
1Canada想移民加拿大Want to immigrate to Canada44,9476.07
2USA移民美国需要什么条件What are the requirements for immigrating to the US?17,2331.49
3New Zealand新西兰移民需要的条件New Zealand immigration requirements11,3334.24
4Australia移民澳大利亚Immigrate to Australia8,0563.6
5Singapore新加坡移民Immigration to Singapore5,898 13.34
6Malta马耳他移民Immigration to Malta5,7014.12
7German德国移民German immigration5,0586.76
8Greece希腊移民Greek immigration4,7992.93
9Portugal葡萄牙移民Portuguese immigration4,31017.68
10UK英国移民UK immigration3,23813.31
11Turkey土耳其移民Turkish immigration2,9015.57
12Spain西班牙移民Spanish immigration2,7821.23
13Cyprus塞浦路斯移民Cyprus immigration1,3157.48
14Thailand泰国移民Immigration to Thailand1,2963.21

Now, we’re taking a look at the search volume and CPC on Baidu for studying in the target country.

III. Studying in the Target Country

Wealthy Chinese investors often prefer for their children to study abroad and typically buy an apartment near their university for them. These are the top destinations according to the selected keywords.

RankCountryKeyword (Chinese)Keyword (English)Monthly Search Volume on BaiduCPC in RMB for Baidu
1UK英国留学Study in the UK83,7463.11
2Singapore新加坡留学Study in Singapore59,6073.75 
3USA美国留学Study in the US13,5471.76
4Australia澳洲留学Study in Australia10,5345.76
5Germany德国留学Study in Germany10,1593.39
6Canada加拿大留学Study in Canada7,4285.41
7New Zealand新西兰留学Study in New Zealand7,0094.73
8Spain西班牙留学Study in Spain5,8355.54
9Thailand泰国留学Study in Thailand5,1362.55
10Malta马耳他留学Study Abroad in Malta1,1926.06
11Portugal葡萄牙留学Study in Portugal3102.49
12Greece希腊留学Study in Greece28712.85
13Turkey土耳其留学Study in Turkey2301.24
14Cyprus塞浦路斯留学Study in Cyprus781.24

Now, we are going one level deeper.

A. Immigration to the Target Country (Investment Immigration)

We are adding more detail by choosing a specific investment immigration keyword for emigrating to the target country. 

As additional information, we’re including the key organic competitors in this list. This allows international immigration companies and real estate agents targeting Chinese HNWI clients to (1) understand their paid and organic competitors on China’s top search engine Baidu, in order to improve their own content to rank better than the competitors, (2) acquire these agencies as partners, so they can promote their projects with them.

RankCountryKeyword (Chinese)Keyword (English)Monthly Search Volume on BaiduCPC in RMB for BaiduCompetitors first Baidu SERP*
1USA美国投资移民US investment immigration88,8614.11Globevisa (ads)
HKimmd (ads)
Tong Hai Heng Valuation (ads)
Future Abroad
WorldWayHK
Banghaiwai
Visa800
Panda98
2UK英国购房移民UK home buying immigration16,5510.32Tong Hai Heng Valuation (ads) 
Univisa
Juwai
Banghaiwai
Hualv
Liuxue86
Kaowang
Fang
3Canada加拿大购房移民Canada home buying immigration9,1381Tong Hai Heng Valuation (ads)
Hinabian
Liveinau
Univisa
WorldWayHK
Banghaiwai
Liuxue86
Zonation
4Greece希腊买房移民Greece home buying immigration5,9270.91Aumeca Group (ads)
Liveinau
Hinabian
Globleen Joy
GoGreece
Uoolu
AustarGroup
5Singapore新加坡投资移民条件Singapore investment immigration conditions4,8747.11 Interkey Advisory (ads)
Aumeca Group (ads)
Hinabian
WorldWayHK
Univisa
FindLaw
6Thailand泰国购房移民Thailand home buying immigration2,1480.56Tong Hai Heng Valuation (ads)
Thai Housing (ads)
Fubang (ads)
Hinabian
Liveinau
Taiguogonglue
Banghaiwai
WorldWayHK
Juwai
Liuxue86
7Australia澳洲投资移民Australian investment immigration1,8485.63Kinghan Education & Migration (ads)
Tong Hai Heng Valuation (ads)
Liveinau
WorldWayHK
Hinabian
Pacific Overseas Group
8New Zealand新西兰投资移民New Zealand investment immigration1,3693.61Tong Hai Heng Valuation (ads)
Liveinau
Hinabian
Yimininfo
Jack Liu
Oxbridgeim
9Germany德国投资移民German investment immigration1,1835.71Tong Hai Heng Valuation (ads)
EK Immigration (ads)
25 (ads)
Germany Immigration Network
WorldWayHK
Hualv
Yiminger
10Malta马耳他投资移民Malta investment immigration5721.32Pacific Overseas Group (ads)
GlobeVisa (ads)
EK Immigration (ads)
Aumeca Group (ads)
Ztoverseas (ads)
Liveinau (ads)
Fubang (ads)
WorldWayHK
Hinabian
Malta Immigration
Panda98
Elanso
11Cyprus塞浦路斯投资移民Cyprus investment immigration5373.21Pacific Overseas Group (ads)
GlobeVisa (ads)
Stylianides Group (ads)
Liveinau
Hinabian
WorldWayHK
Prime Property Group
Richful Deyong
Elanso
12Portugal葡萄牙投资移民Portuguese investment immigration5131.91Fubang (ads)
Ztoverseas (ads)
Liveinau
Hinabian
WorldWayHK
Elanso
Yimininfo
Panda98
Banghaiwai
13Turkey土耳其购房移民House buying immigration to Turkey4498.23Civisa (ads)
Fubang (ads)
Dacheng Immigration (ads)
Binyuvisa (ads)
Best BI (ads)
Panda98
WorldWayHK
Hinabian
Teqhz
PKF China
Elanso
14Spain西班牙买房移民House buying immigration to Spain3018.63Aumeca Group (ads)
Elanso
Liveinau
Hinabian
Austar
* based on a baidu.com search for the respective Chinese keyword on 20 March 2022; results from the first SERP (search engine results page) without Baidu-ecosystem results like Baidu Wenku, Zhihu, Tieba, and Baijiahao; without news sites like Sohu; page reloaded three times to identify as many advertisers of Baidu ads (广告) as possible.

Focusing even more on the actual real estate purchase intent keywords, we’ll take a look at the monthly search volume on Baidu and the CPC for real estate purchase keywords next. 

B. Real Estate in the Target Country

Real estate is the most common investment immigration route to gain a Golden Visa or Golden Passport.

As this article focuses on a comprehensive overview of the China outbound real estate investment landscape, we’ve also researched the key organic competitors for the keywords related to real estate and the target country.

RankCountryKeyword (Chinese)Keyword (English)Monthly Search Volume on BaiduCPC in RMB for BaiduCompetitors first Baidu SERP*
1Thailand泰国买房Buying a house in Thailand9,0431.73Globevisa (ads)
Thai Housing Manager (ads)
Fraproperty
Uoolu
Zhuzhe
Xhaiwai
2Germany德国买房Buying a house in Germany3,2131.41Globevisa (ads)
Lianjia
Uoolu
Fang
3USA美国买房Buying a home in America2,9170.73YouHomes (ads)
ChineseInLA (ads)
Valeon (ads)
Waijule
Beimeigoufang
Lianjia
Jiwu
Fraproperty
Fang
YV Home
4UK英国房产UK real estate1,6569.84UK Fang (ads)
Lanshauk
Uoolu
Juwai
Youinvest
Fang
Lianjia
5Portugal葡萄牙房产Portugal real estate1,4998.85Dacheng Immigration (ads)
Apearth (ads)
Ztoverseas (ads)
UHomes (ads)
Liveinau
Uoolu
WorldWayHK
Hellenic Center
Mafangwang
Hinabian
Juwai
Glofang
Elanso
PortugalFang
Leju
6Greece希腊移民买房Greece immigration house buying1,3173.74Apearth (ads)
Aumeca Group (ads)
Liveinau
Uoolu
WorldWayHK
Hellenic Center
Mafangwang
Hinabian
7Singapore新加坡购房Buying a house in Singapore1,1722.37 Singapore Fang (ads)
Banghaiwai (ads)
Interkey Advisory (ads)
G58
Juwai
Fraproperty
Fangdichanxinjiapo
8Turkey土耳其房产Turkey real estate1,0384.02Binyuvisa (ads)
Uoolu
Juwai
WorldWayHK
Teqhz
PropertyTurkey
Qhiwi
Haiwai Anjuke
9Canada加拿大房产Canada real estate9520.91QUAD (ads)
ChineseInLA (ads)
Mflike (ads)
Oxbridgedu (ads)
UHomes (ads)
ZGXlaw (ads)
Fang
Juwai
SunYears
Realtor
Hinabian
Lianjia
10Spain西班牙房产Spanish real estate 9181.13Uoolu
Juwai
Hinabian
Fraproperty
Zhifang
Guodao
Leju
Panda 98
Aiaig
11Australia澳洲买房Buy a house in Australia87810.18Fdcbgw (ads)
Aozhou Glofang
Uoolu
GoHome
Juwai
MyFun
Aozhougoufang
FraProperty
12Cyprus塞浦路斯房产Cyprus real estate5130.56 Stylianides Group (ads)
C.R. International Corporation (ads)
Elanso
Uoolu
Juwai
Hinabian
Guodao
Tritonia Developers
13New Zealand新西兰房产New Zealand real estate4551.24Juwai
SkyKiwi
Zsyashen
Kannz
Leju
Zhifang
14Malta马耳他房产Malta real estate1040.96Uoolu
Banghaiwai
Juwai
Byimin
Haiwai Anjuke
Liuxue86
* based on a baidu.com search for the respective Chinese keyword on 16 March 2022; results from the first SERP (search engine results page) without Baidu-ecosystem results like Baidu Wenku, Zhihu, Tieba, and Baijiahao; without news sites like Sohu; page reloaded three times to identify as many advertisers of Baidu ads (广告) as possible.
baidu keyword research
Source: Baidu Keyword Research Tool (March 2022)

So, how can you reach these Chinese HNWIs?

5. Top Chinese Immigration Agencies and Listing Platforms

Knowing your competition allows you to stay ahead of the game! It reveals areas where you can potentially do better for your own business and helps you to adjust your marketing strategy to reach your target group first.

The largest and most visible immigration agencies and listing platforms with the widest reach in China are as follows.

Top 3 global advertising agency/platform competitors (that ran PPC ads for investment immigration and real estate keywords in combination with the target country):

  1. Tong Hai Heng Valuation (agency)
  2. Globevisa (platform)
  3. Apearth (agency)

Top 3 global organic agency/platform competitors (large established companies with a wide organic reach):

  1. Hinabian (agency)
  2. WorldWayHK (agency)
  3. Juwai (platform)

You can either consider these agencies and platforms as partners or analyze their performance for your own SEO and PPC.

Further Research on Chinese Social Media for China Outbound Real Estate Investment

To find further Chinese agencies and platforms for real estate and investment immigration, you can search for WeChat Official Accounts on WeChat, research hashtags on Weibo and Douyin to identify KOL, KOC, and Wanghong influencers with whom you then can collaborate.

Do you want to get a comprehensive list of more than 300 Chinese immigration agencies with all contact information, so you can easily message them today to discuss a partnership? Click here to access Tenba Group’s unique real estate agent list.

6. How to connect with Chinese HNWIs for China Outbound Real Estate Investment

International real estate and immigration agents, companies, platforms, and developers can reach Chinese high-net-worth individuals through

  • SEO: optimizing their website for the top Chinese search engine Baidu → increase exposure
  • PPC: running targeted Baidu ads → lead generation
  • influencers in their industry on Chinese social media
  • Collaborating with partners in China and Greater China → reach, convert, and serve Chinese clients

Finally, let’s take a look at how to recruit real estate agents in China and beyond.

7. Recruiting Real Estate Agents for China Outbound Real Estate Investment

Selected Chinese social media platforms, search engine optimization, and marketing, a Chinese website, and marketing materials are excellent starting points to establish an effective and efficient network of real estate agents and enter impactful partnerships.

Connect with hundreds of immigration agencies, immigration law offices, and platforms in mainland China and the Greater China Area (Singapore, Macao, Taiwan, Hong Kong) quickly and easily to market your properties to Chinese investors.

China Outbound Real Estate Investment – The Takeaway

China cross-border real estate investment is an attractive way for China’s HNWI to upgrade their life, manage their wealth, as well as provide education, business, and lifestyle opportunities for themselves and their families.

International real estate agents, immigration lawyers, and asset managers can use these insights to connect with wealthy Chinese who wish to invest in real estate abroad and gain extensive benefits that come with this. Chinese SEO, PPC, KOL/KOC/Wanghong influencer marketing, and entering partnerships with Chinese specialists are the best ways to do so.

China Outbound Real Estate Investment

Are you excited to take the next step, but don’t know how to get started? A China expert like Tenba Group will kickstart your process to lift the potential of the China outbound real estate investment market. Contact our experienced China professional to get your FREE consultation today!

The post China Outbound Real Estate Investment – A Comprehensive Data Report appeared first on Tenba Group.

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Must-Knows Before Investing in Chinese Stocks https://tenbagroup.com/must-knows-before-investing-in-chinese-stocks/ Tue, 22 Feb 2022 14:05:25 +0000 https://tenbagroup.com/?p=24135 Investing in Chinese Stocks, whether in their local market or as foreign shares, can be a lucrative business and/or retirement provision. China aspires to become the world’s largest economy by 2030. Extremely hard-working citizens and a tightly administered country pave the way for innovation and growth. China is already ahead of the West in terms …

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The post Must-Knows Before Investing in Chinese Stocks appeared first on Tenba Group.

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Investing in Chinese Stocks, whether in their local market or as foreign shares, can be a lucrative business and/or retirement provision.

China aspires to become the world’s largest economy by 2030. Extremely hard-working citizens and a tightly administered country pave the way for innovation and growth. China is already ahead of the West in terms of 5G networks, electric vehicles, online payment, AI, and other IT-driven sectors.

In 2021, China introduced a number of new regulations in the tech sector with the aim to increase public benefit (公益) for everyone and to combat monopolies, keeping the knowledge and influence of Chinese companies in the country. This move drove global investors away and their capital out of the Chinese market. 

However, leading banking experts and investors view the most significant legislation as having passed and are now being implemented. Therefore, they predict that investors are preparing to jump into Chinese technology stocks. For example, the CEMAC-GS Leading Index is anticipated to grow by 13-30% in 2022.

Let Tenba Group guide you through the largest Chinese stocks. Read up on the different niches, and how to invest in Chinese stocks from within or outside of Mainland China. 

Disclaimer: The information in this article has been researched to the best of our knowledge and provides an overview of the topic of investing in Chinese stocks as of Q1/2022. As government rules may change and investment tactics depend on your very specific personal situation and knowledge, this article shall NOT be viewed as financial or investment advice.

Table of contents

Introduction to Investing in Chinese Stocks

As you may know, China is the world’s most populous country with the second-largest economy. In fact, Chinas GDP has had growth rates of up to 9.5% in the last 10 years.

Despite the Covid-pandemic and consequent global supply chain disruptions, China’s economy continues to grow strongly, although Chinese officials may be hyping the actual economic development, and the GDP growth rate is actually slowing down a little. However, this doesn’t have to be a negative implication for the Chinese stock market.

At the same time, an improving economy instead of a surging economy creates slower, healthier growth, which in turn leads to high common prosperity vs. only a handful of the super-rich. Between 2022 and 2026, the Chinese GDP growth rate is expected to average around 5%, which is still significantly above other major global economies. 

China’s success may be explained by the combination of market size, lifting growth opportunities, urbanization, and digitalization. There is an almost endless amount of growth and expansion measures by the Chinese government to promote innovation and technology. 

A prominent example to boost China’s economy and ensure steady GDP growth is its Belt and Road Initiative. On the other hand, such investments and economic boosters add to the country’s national debt, which is growing at 9% per year on average and is expected to reach 20 billion USD in 2026.

At the same time, large corporations are incentivized to expand into their surrounding areas. IT and future-driven companies have to pay little or no taxes. In addition, the 2022 Winter Olympics in Beijing are boosting the economy, whereas the Party Congress in Autumn 2022 is a “major event” in Chinese politics and may come with policy and other changes, likely in ease of regulations.

China knows that the race among industrialized nations for power and influence will be determined through innovation and the economy. 

As the global Covid-pandemic is fading out, the Chinese stock market is expected to bounce back in 2022, likely led by green energy and big tech.

Common Investment Terms for Investing in Chinese Stocks

CSI 300 Index: The CSI 300 is the leading stock market index in China, depicting the performance of the top 300 stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange. It has two sub-indexes: CSI 100 and CSI 200.

Hang Seng Index (HSI): The leading stock index in Hong Kong and one of the most important ones in Asia. It is a price index and tracks the share prices of the 50 largest and most traded companies on the Hong Kong Stock Exchange.

ISIN: An International Securities Identification Number (ISIN) uniquely identifies a stock. The ISIN code is a 12-character alphanumeric code. CN stands for China (A Shares, B Shares), KYG stands for Cayman Islands (VIEs), BVI stands for British Virgin Islands (VIEs), and US stands for USA (ADRs).

Listing standards for companies: For example, at the New Beijing Stock Exchange, retail investors must have securities assets of at least 500,000 RMB (~78,000 USD) and have an investment history of more than two years to be listed at the BSE.

Preferred vs. Common Stock: Preferred stocks give NO voting rights to shareholders whereas common stocks do. However, preferred shareholders are paid dividends before common shareholders. For day traders and short-term investors, ADRs may be more suitable compared to common stocks. That’s because ADRs provide higher liquidity and are easier to trade than a foreign stock (in terms of commissions, frictional costs, and spreads).

VIE: Chinese companies that are set up as Variable Interest Entities (VIE) are allowed to list in offshore markets if they register with regulators and meet compliance rules. They are normally registered in tax havens like the Cayman Islands and are essentially holding companies designed to establish profit-sharing mechanisms between foreign investors and Chinese companies. 

5 Key Risks when Investing in Chinese Stocks

Generally speaking, investors are well-advised to be cautious when investing in Chinese stocks. 

1. Arbitrary Government Regulations

The government may implement short-notice alterations of regulations, restrictions, censorship, fines, or bans. The official reasons are often related to (cyber) security, citizen safety, fair competition, and pro modesty. 

For example, in recent years, the Chinese government tightened the regulations for private Chinese companies that wanted to IPO abroad, in particular, the US, but also Hong Kong. A well-known example is driving service provider Didi (the “Uber” of China), which had to do a cybersecurity audit shortly after its IPO in the US, resulting in a ban of its app in China.

Besides, the Chinese government may be “adjusting” reports on market size, growth numbers, and industry development to fit the political narrative, particularly, in the face of major political events like the 2022 Party Congress.

Finally, whereas Chinese companies principally can list on foreign stock exchanges, especially US exchanges, foreign companies are banned from listing on Chinese stock exchanges.

2. Insider Trading for Investing in Chinese Stocks

The reality, however, may be more related to expropriation and nationalization. However, industry experts believe that the peak of regulation tightening has been reached. Insiders may take advantage of their knowledge and access to information.

3. VIEs as Auxiliary Construct for Foreign Investors

VIEs work differently than regular stocks. When investors buy VIE, they don’t technically own the shares themselves, but parts of an offshore shell company that has a claim to the profits of the respective stock.

Therefore, VIEs are an auxiliary construct for foreigners to invest in Chinese stocks that are actually banned for foreigners, like the tech industry. 

Whereas by law it is illegal for foreigners to invest in specific niches like Chinese tech companies, in practice it is tolerated via the VIE construct. However, this is subject to the discretion of the Chinese government.

4. Limitations of Investments by Foreigners

In general, the Chinese government strongly regulates the performance of the economy including investments and stocks. 

This includes the limitation of foreign investors to invest in Chinese companies, especially the booming tech sector.

5. Political-Motivated Delisting

As a political measure in the ongoing China-US trade war, the US may delist ADRs from the US market, in which case the company could buy back the shares, the investor could transfer the shares, or the shares may end up in limbo. Such a delisting happened in 2021 when China Mobile was forced to delist from the NYSE.

Other risks are more general, including less stringent disclosure requirements, looser accounting standards, and regulatory differences.

Foreigners Investing in Chinese Stocks

It is challenging for foreign investors to invest directly in Chinese companies. And there is also a “political risk” as by law foreigners are prohibited from directly investing in China. 

Professional foreign investors however can invest in Chinese companies through ADRs, ETFs, mutual funds, A Shares (through the QFII program), B Shares, H Shares (Hong Kong-listed Chinese stocks), VIEs, and by collaborating with Chinese businesses in mainland China. Except for B Shares, private foreign investors cannot trade at Chinese stock exchanges.

Opportunities of Investing in Chinese Stocks

However, the Chinese stock market also comes with unique opportunities. As the correlation with other major global markets is low, Chinese stocks provide a great diversification opportunity. 

Besides, China’s increasing openness to foreign direct investment (FDI) – in 2020 China was the world’s second-largest FDI recipient after the US – is an important contributor to the country’s economic growth. 

Finally, the price/earnings ratio is at a very low level, which is not commonly found any more in the Western investment landscape.

Global Investors Who Are Investing in Chinese Stocks

The major Western accounting firms Ernst & Young, PWC, KPMG, and Deloitte recognize China as a huge investment opportunity. 

Widely regarded as the most successful investor worldwide, Warren Buffet started investing in Chinese stocks in 2005, and now holds shares of BYD (manufacturer, including electric vehicles) and CATL (electric vehicle battery manufacturer) among others.

Other renowned investors like Bridgewater’s Ray Dalio value the benefits of investing in China in terms of the aforementioned portfolio diversification and growth opportunities. Likewise, Charlie Munger has recently doubled his company’s investment in the Alibaba Group.

Key Differences between Chinese & Western Environments for Investing in Chinese Stocks

China can afford to exclude Google, Facebook, and Amazon from their markets and still have the upper hand with globally used WeChat, Alibaba, and an enormous digital ecosystem. Why is that so, you may ask? Well, China’s more than 1.4 billion population equals a quarter (!) of the global population and therefore has huge market leverage.

Besides, most large companies are fully or partly government-owned (through equity or licenses). For example, every car manufacturer needs numerous licenses from the government before they can start production. 

Especially the banking, energy, and raw materials sectors are firmly owned by the Chinese state. Therefore, state-owned companies have a significant economic influence, contributing to more than 40% of the GDP and 60% of the country’s jobs. And economic powerhouses Alibaba and Tencent also wouldn’t be where they are now without the government support.

In fact, in theory, the Chinese government owns everything: companies, real estate, capital, and workforce. Although this has loosened more and more over the last decades, the Chinese state does have the power to “expropriate”, albeit at a fair market price.

Consequently, the government allocates where the capital goes. It can be viewed as a mix between planned economy and a market economy. Since the planned economy under Mao Zedong has left China stagnant, most are satisfied with today’s market economy in China.

In China, unlike Western countries, nobody seems to have a problem with surveillance, cameras, routine ID checks at hotels or public transportation, and so on – given that it increases public safety and security. Even the latest “social score” doesn’t rouse Chinese citizens. 

At the same time, we would also like to point out the main similarity between China and Western countries, which is the high consumer focus.

Chinese Share Classes for Investing in Chinese Stocks

Chinese companies may list their stocks on multiple exchanges – domestic and foreign. If you are planning on investing in Chinese stocks, you should know the following share classes.

Generally speaking, it’s easier for larger companies to be listed outside of China (offshore) whereas smaller companies often may not have the resources or expertise to do so and may only list within China (onshore).

ADR

An American Depositary Receipt is a certificate issued by a US bank representing a specified number of shares in foreign stock. ADRs in more than 350 Chinese companies are listed.

The certificates are traded on the NYSE and NASDAQ. Some companies such as Pinduoduo are only listed in the US and therefore have an ADR status. However, ADRs are at risk of forced delisting by the US government as a political measure.

A Shares

Equities of companies incorporated and listed in mainland China (onshore) with the currency RMB. Since 2003, A Shares have been accessible to international investors through the Qualified Foreign Institutional Investor (QFII) system. The QFII program allows specified licensed international investors to buy and sell on mainland China’s stock exchanges. 

However, this only applies to selected industries. Trending sectors like the tech industry are exempt from professional foreign investors, which is where the VIE setup comes into play.

B Shares

Equities of companies incorporated and listed in mainland China (onshore) with the currencies USD and HKD. B Shares are traded in USD on the Shanghai Stock Exchange and in HKD on the Shenzhen Stock Exchange.

Whereas B Shares are accessible to foreign investors, there are only a few investable stocks left on this market, which is why in practice, most investors neglect B Shares.

H Shares

Equities of companies incorporated in China, but listed in Hong Kong and denominated in HKD (offshore). H Shares are accessible to foreign investors directly.

N Shares

Shares of Chinese companies incorporated outside of mainland China and listed on the New York Stock Exchange, the NASDAQ Exchange, or the NYSE American. A majority of the revenue or assets must be derived from mainland China. Sometimes, ADRs of H Shares and Red Chips are also referred to as N Shares.

P Chips

Shares of Chinese companies incorporated outside of mainland China, mostly in Hong Kong. P Chips are traded on the Hong Kong Stock Exchange and are owned by private sectors in China.

Red Chips

Equities of companies, incorporated outside of mainland China (offshore) but owned by China state entities that generate most of their revenue in China.

Red Chips are denominated in HKD, traded in Hong Kong, and accessible to foreign investors directly. This makes it easier for Chinese companies to acquire foreign investments.

S Chips

Shares of Chinese companies that are listed on the Singapore Exchange. One index that covers the prices of S Chips is the FTSE ST China Index.

Comparison for Investing in Chinese Stocks

Compared to ADR, H Share stocks have lower risks for foreign investors. That’s because ADR on the US market can be delisted by the US government, whereas native H Share listings on the Hong Kong stock exchange have no reason to be delisted by the Chinese government.

Stock Exchanges in China

In mainland China, there are three main stock exchanges: Beijing, Shanghai, and Shenzhen. In the Greater China Area, the Hong Kong and Taiwan stock exchanges are most noteworthy for investing in Chinese stocks.

The SSE and SEHK have similar listing requirements as US stock exchanges, e.g., financial reports, and audits. However, Chinese accounting standards differ from the US GAAP principles and there are regulatory differences. Besides, reports and statistics are often adjusted to fit the political narrative in China.

New Beijing Stock Exchange (BSE) & NEEQ

Established in September 2021 to aid the growth of small and medium enterprises, the New Beijing Stock Exchange (BSE) is based in China’s capital and operates independently. Trading at the New Beijing Stock Exchange started on 15 November 2021, and 81 companies are currently listed there.

The BSE can be considered an upgraded version of the National Equities Exchange And Quotations (NEEQ). The New Beijing Stock Exchange is owned 100% by the NEEQ. 

The NEEQ also referred to as the “New Third Board”, was established in 2012 to serve micro-companies, SMEs, and startups, which could not fulfill the listing standards of the stock exchanges in Shanghai and Shenzhen.

Now, the NEEQ is geared more towards high-quality and innovative companies. To date, more than 10,000 companies are listed at the NEEQ.

With the establishment of the SME-specialized BSE, the Chinese government is trying to keep IPOs of Chinese, technology- and future-oriented companies in the country – just like it did with the establishment of the STAR Market in the Shanghai Stock Exchange.

As the Beijing Stock Exchange just opened, the following questions are still to be answered:

  • Can foreign-invested enterprises IPO on the BSE?
  • Will the BSE draw funds from the Shanghai and Shenzhen stock exchanges?
  • General impact of the BSE on the Chinese stock market, the economy, and investors?

Next, let’s take a look at the other two main stock exchanges in mainland China for investing in Chinese stocks.

Shanghai Stock Exchange (SSE) & STAR Market

Did you know that the birthplace of securities trading in China is Shanghai, with roots dating back to the 1860s? The Shanghai Stock Exchange was established in 1990 and is now the largest stock exchange in Mainland China and the fifth-largest stock exchange in the world.

As such, it is an important pillar of the Chinese economy. Unlike the Hong Kong Stock Exchange, the SSE is still not entirely open to foreign investors and often affected by the decisions of the Chinese government.

Besides, there is the Shanghai Stock Exchange “STAR Market” (Science and Technology Innovation Board), a Chinese science and technology-focused equities market that was established in 2019. It mainly lists start-ups as well as high-tech companies and can be regarded as equivalent to the US NASDAQ.

Today, more than 1,500 companies with more than 1,600 stocks are listed on the Shanghai Stock Exchange while more than 370 companies are listed on the STAR Market.

Shenzhen Stock Exchange (SZSE) & ChiNext

The Shenzhen Stock Exchange (SZSE) was founded in 1990 and lists a variety of market indices with different market positioning. The SZSE focuses on Blue Chip stocks (large well-established companies with an excellent reputation) with high market capitalization.

The SZSE also established ChiNext in 2009 as a subsidiary in the style of the NASDAQ. ChiNext aims to attract innovative and fast-growing companies, especially high-tech firms. The ChiNext listing standards are less strict than those of the Shenzhen Stock Exchange.

In 2021, more than 3,000 companies were listed on the SZSE with the majority from the manufacturing sector. Meanwhile, more than 800 companies are listed on the ChiNext exchange.

Whereas the STAR Market focuses more on technology companies, the ChiNext is geared more towards growth-oriented innovative and start-up enterprises.

Stock Exchange of Hong Kong (SEHK, SEHK)

The Stock Exchange of Hong Kong (SEHK) or Hong Kong Stock Exchange (HKSE) is the fourth largest stock exchange worldwide with more than 2,500 listed companies and the largest bourse in terms of market capitalization. The SEHK is reported to be the fastest-growing stock exchange in Asia.

Taiwan Stock Exchange (TWSE)

The TWSE was established back in 1961 in Taipei and began operating as a stock exchange in 1962. Today, more than 800 companies are listed on the Taiwan Stock Exchange. 

Investing in Chinese Stocks: Beyond Tech Companies

The Chinese investment landscape is largely technology and communication-driven. We will take a look at a selection of the most significant industries and companies as well as emerging sectors and enterprises. Keep in mind the restrictions – and solutions/workarounds – for investing in Chinese stocks by foreigners.

  1. E Commerce/Technology
  2. Mobility
  3. Banking
  4. Solar Power
  5. Health
  6. Insurance
  7. Luxury/Sports
  8. Consumer Goods

Due to the bursting of the real estate bubble in China, we will take a look at this sector and further industries at a later point.

1. E Commerce/Technology Industry

With the Chinese retail market observing a 10% annual growth prediction until 2025, stocks in this sector are generally expected to have good investment potential.

The tech industry still observes a heightened regulatory risk by Chinese and overseas governments, and foreigners are not legally allowed to invest in Chinese tech stocks – although it is possible in practice, and tolerated. On the other hand, despite the Covid-induced semiconductor chip shortage, demand remains strong.

Alibaba

This global e commerce giant is one of the largest online retailers worldwide. As of 2020, the Alibaba Group has the sixth-highest global brand valuation. With more and more services around Cloud and payment solutions (AliCloud, AliPay), Alibaba can also be considered a Chinese tech giant, equivalent to Amazon, eBay, and PayPal.

Founded in 1999, Alibaba was originally China’s answer to Amazon. Following its ADR IPO on the New York Stock Exchange in 2014, the Alibaba Group has since become the largest B2B online marketplace.

  • NYSE Ticker (USA): BABA
  • H Shares Ticker (Hong Hong): 9988
  • ISIN: US01609W1027 (ADR), KYG017191142 (VIE)
  • Risks: Chinese government tax hikes, fines, and antitrust regulations
  • Opportunities: leading analysts generally see BABA as a “strong buy”, also as ADR
investing in chinese stocks
Source: tradingview.com (17 February 2022); currency in USD

JD.com

China’s second-largest online retailer, JD, is backed by Tencent. The company first went public in 2014 at the NASDAQ as the biggest listing of a Chinese company in the US.

  • NASDAQ Ticker (USA): JD
  • H Shares (Hong Hong) Ticker: 9618
  • ISIN: US47215P1066 (ADR), KYG8208B1014 (VIE)
  • Risks: JD is considered less risky than Alibaba as JD faces fewer fines and restrictions
  • Opportunities: leading analysts generally see JD as a “strong buy”
investing in chinese stocks
Source: tradingview.com (17 February 2022); currency in USD

Pinduoduo

This e commerce platform is renowned for its group-buying services. In 2018, just 3 years after its establishment, Pinduoduo went public on the NASDAQ.

  • NASDAQ Ticker (USA): PDD
  • ISIN: US7223041028 (ADR)
  • Risks: the company is not yet profitable and finds itself in a highly competitive market with Alibaba, JD.com, and JD.hk
  • Opportunities: long-term opportunities as the second-largest e commerce company in China with 683 million active buyers
Source: tradingview.com (17 February 2022); currency in USD

Baidu

The most popular search engine in China with more than 80% market share, leader in AI and innovative fields. In 2007, Baidu became the first Chinese company in the NASDAQ-100 index. The Western equivalent is clearly Google.

  • NASDAQ Ticker: BIDU
  • H Shares (Hong Hong) Ticker: 9888
  • ISIN: US0567521085 (ADR), KYG070341048 (VIE)
  • Risks: increasingly popular and highly-functioning in-app search functions on ubiquitous social media WeChat (Tencent), TikTok (ByteDance), and Toutiao (ByteDance), as well as the Alibaba ecosystem with one-stop-fulfillment functionalities, may make a pure search engine less relevant. The Chinese government also has an eye on Baidu’s market power.
  • Opportunities: solid business concept, leadership in AI, large ecosystem with close to 50 digital services/products, including electric vehicles
Source: tradingview.com (17 February 2022); currency in USD

Tencent Holdings

The e commerce giant behind WeChat and messenger QQ was first listed on the Hong Kong Stock Exchange in 2004. The company’s super-app WeChat can be compared to Facebook including WhatsApp and Instagram.

  • H Shares (Hong Hong) Ticker: 700
  • ISIN: KYG875721634 (VIE)
  • Risks: Short-term headwinds and delisting risk as well as other new government regulations like the 2021 anti-monopoly crackdown against Tencent, Alibaba, JD.com and the likes that included financial penalties. However, compared to its competitors, Tencent didn’t take that much of a nosedive after the crackdown.
  • Opportunities: With its superstar WeChat and other significant investments, Tencent has a solid industry standing and growth outlook. Some industry experts even say that the stock is undervalued right now. Tencent’s diversified portfolio and particular strength in the gaming sector contribute to the upward trend prognosis.
Source: tradingview.com (11 February 2022); currency in USD

Xiaomi

Founded in 2010, Xiaomi is a leading manufacturer of consumer electronics (software, home, and household appliances). It is the second-largest manufacturer of smartphones after Samsung.

Xiaomi is a prominent example of delisting when the US government temporarily banned this tech stock in 2021.

  • H Shares (Hong Hong) Ticker: 1810
  • ISIN: KYG9830T1067 (VIE)
  • Risks: US-tensions; privacy concerns around data collection; alleged imitation of Apple; several controversies and lawsuits around invalid patents/patent infringement
  • Opportunities: market penetration; innovation capacity; above-industry ROCE
Source: tradingview.com (11 February 2022); currency in USD

Meituan

Formerly known as Meituan-Dianping, this popular Chinese local shopping app was founded in 2010, allowing Chinese consumers to purchase entertainment (e.g. tickets), dining, delivery, travel, and other services at the tip of their fingers. 

The app basically unites Western equivalents like Google My Business, Delivery Hero, Eventim, and UBER Eats.

  • H Shares (Hong Hong) Ticker: 3690
  • ISIN: KYG596691041 (VIE)
  • Risks: high penalty in 2021 for violating anti-monopoly regulations; welfare of the company’s delivery personnel; as part of the tech sector, Meituan is affected by new policies and regulations in this sector
  • Opportunities: expansion into the booming group buying market, large cash on hand level (similar to JD and Pinduoduo), recovery of the tourism and even sector post-Covid will likely boost ticket, travel, and service purchases
Source: tradingview.com (11 February 2022); currency in USD

2. Mobility Industry

China is widely regarded as an industry leader in many sectors, including electric mobility. No other country produces and uses more electric vehicles. The streets are full of electric scooters and electric cars. In southern China, almost all taxis and buses are electric, with many produced by BYD.

In fact, BYD and NIO are the most well-known companies in this sector. In 2021, BYD sold more than 600,000 vehicles while NIO sold almost 100,000 vehicles.

NIO

Founded in 2014, NIO is a multinational automobile manufacturer of electric vehicles, specializing in sports cars in the premium segment. Its investors include Tencent (WeChat) and Lenovo. The NYSE IPO was in 2018.

  • NYSE Ticker (USA): NIO
  • ISIN: US62914V1061 (ADR)
  • Risks: relatively new brand; slower growth rate than electric vehicle competitors; company bail-out out by the Chinese government in 2020; acquisition of sufficient investment capital
  • Opportunities: innovative and trending renewable energy sector; autonomous vehicle testing program; industry experts rate NIO undervalued
Source: tradingview.com (17 February 2022); currency in USD

BYD Company

Founded in 1995, BYD Co. Ltd. (Build Your Dreams) is a Chinese manufacturing company, specializing in automobiles (electric, hybrid), solar panels, and rechargeable batteries. In 2008, Warren Buffett’s Berkshire Hathaway Inc. acquired about 10% in stocks of the BYD company.

  • H Shares (Hong Hong) Ticker: 1211
  • ISIN: US05606L1008 (ADR), CNE100000296
  • Risks: legal disputes around alleged forced labor and patent litigation; general tech sector risks 
  • Opportunities: stable growth; established dominant electric vehicles player in China in a trending segment – pushed by the Chinese government (green growth)
Source: tradingview.com (11 February 2022); currency in USD

Li Auto

Also known as Li Xiang (the name of the founder), this Chinese electric vehicle manufacturer was founded in 2015. In 2021, Li Auto sold more than 90,000 vehicles. The NASDAQ IPO was in 2020.

With a lower price-to-sales ratio compared to BYD and Nio, Li Auto is able to grow its sales at a higher rate compared to its competitors.

  • NASDAQ Ticker (USA): LI
  • H Shares (Hong Hong) Ticker: 2015
  • ISIN: US50202M1027 (ADR), KYG5479M1050 (VIE)
  • Risks: relatively new brand; comparatively expensive sales prices; highly competitive environment
  • Opportunities: growth in the domestic market anticipated; production being scaled up; increase of income and cash on hand
investing in chinese stocks
Source: tradingview.com (17 February 2022); currency in USD

XPeng

Founded in 2014, XPeng Motors is a Chinese electric vehicle manufacturer. In 2021, XPeng sold around 100,000 vehicles. Among others, XPeng is backed by the Alibaba Group and Xiaomi as strategic investors. 

  • NYSE Ticker (USA): XPEV
  • H Shares (Hong Hong) Ticker: 9868
  • ISIN: US98422D1054 (ADR), KYG982AW1003 (VIE)
  • Risks: relatively new brand; very high growth rates of up to 500%; XPeng stock is overvalued according to industry insiders
  • Opportunities: exciting products range; autonomous vehicles testing permit in the US; XPeng’s stock is trading at a better price-to-forward-sales ratio compared to international competitors
investing in chinese stocks
Source: tradingview.com (17 February 2022); currency in USD

3. Banking Industry

Other strong industries in the Chinese market are banks and real estate companies, which both are based on the real estate boom in China of the last 30 years. Unsurprisingly, the banking sector in China is now the largest in the world, managing the largest amounts of assets worldwide.

Although this sector is very large, it is rather risk-prone, especially with its linkage to property prices, property debt, and exports (China-US trade war).

Generally, the banking sector is a solid choice for value investors, who seek stocks that trade for less than their intrinsic value. Besides, the banking sector pays dividends, which provides investors with a share in profits.

On the other hand, investors may want to consider the overall recent weak performance of the Chinese real estate sector which is tied directly to the banking sector.

Industrial and Commercial Bank of China

Founded as a limited company in 1984, the Industrial and Commercial Bank of China (ICBC) is a state-owned commercial bank with capital provided by the Ministry of Finance of China. In terms of total assets, ICBC is the largest bank in the world (more than 5.1 trillion USD in 2020). 

ICBC is ranked first on the Forbes Global 2000 list of the world’s biggest public companies since 2016 and is considered a systematically important bank worldwide.

  • H Shares (Hong Hong) Ticker: 1398
  • ISIN: CNE1000003G1
  • Risks: below average growth rate; isolated controversies around money laundering, bribery, and lack of due diligence (2005-2021)
  • Opportunities: ICBC shares are less expensive compared to similar stocks; safely financed (Government-backed)
investing in chinese stocks
Source: tradingview.com (11 February 2022); currency in USD

Bank of China

Founded in 1912, the Bank of China (BOC) is the fourth largest bank in the world by total assets (after ICBC, China Construction Bank, and the Agricultural Bank of China). BOC is a separate legal entity from its subsidiary, the Bank of China (Hong Kong).

As of 2019, it was the second-largest lender in China and it is also considered a systemically important bank by the international Financial Stability Board.

  • H Shares (Hong Hong) Ticker: 3988
  • ISIN: CNE1000001Z5
  • Risks: isolated international controversies around lack of due diligence and money laundering (2008-2014)
  • Opportunities: attractive dividend yield and a payment history; “buy” rating by international industry experts
Source: tradingview.com (11 February 2022); currency in USD

4. Solar Power Industry

The value of the global renewable energy sector is anticipated to reach close to 2 trillion USD by 2030.

With a global community seeking to make the world’s energy supply sustainable, renewable energy systems are THE trending industry together with tech/AI, e commerce, and green mobility.

On the other hand, green energy is a highly competitive field. Plus, with market saturation, solar system module prices will start to decline.

JinkoSolar

Founded in 2006, JinkoSolar Holding Co., Ltd. is the world’s largest solar panel manufacturer, selling its products internationally. JinkoSolar has more than 13,500 employees worldwide and 15 overseas subsidiaries. The company went public on the NYSE in 2010. 

In 2021, the US started banning the import of JinkoSolar products due to concerns of forced Uyghur labor.

  • NYSE Ticker (USA): JKS
  • ISIN: US47759T1007 (ADR)
  • Risks: comparatively low margins on sales
  • Opportunities: ongoing expansion; above-industry growth rates (production, revenue); undervalued according to industry experts; good pick for value investors
Source: tradingview.com (17 February 2022); currency in USD

Xinyi Solar

Founded in 2008, Xinyi Solar Holdings (XYS) is the world’s largest solar glass manufacturer, focusing on the Chinese local market. Xinyi Solar is the third-largest private solar farm developer and operator in China.

Xinyi Solar is an investment holding company, deriving revenue from two core business segments, the manufacturing and sale of solar glass as well as solar farm businesses.

  • H Shares (Hong Hong) Ticker: 968
  • ISIN: KYG9829N1025 (VIE)
  • Risks: below industry growth-rates; comparatively high share prices; certain degree of volatility
  • Opportunities: short-term buy signals from industry experts; undervalued according to industry experts; stable share prices compared to peers; earnings are expected to increase by more than 80% over the next years
Source: tradingview.com (11 February 2022); currency in USD

5. Health Industry

In our fast-paced global society, and especially in the face of the worldwide Covid-pandemic, the pharmaceutical and BioTech industries are booming. By adopting trends like AI to revolutionize data analytics, and automation to optimize production, they are ensuring to further stay ahead of the game.

This is also particularly relevant in regards to the overall improved health and well aging population, making the pharma industry and its products increasingly important. The research and further development of mRNA technology for Covid-vaccines have also given a push to this technique, also providing more data for cancer research.

So, whatever the market situation is, the pharmaceutical industry is an “evergreen” sector. Globally, it is a 50 billion USD industry with 7%-8% growth rates per year. In particular, the global biotechnology market size is expected to continue its strong upward trend with annual growth rates of 15% and more between 2021 and 2028

Besides, out of the 33 WHO-approved Covid-vaccines, China is the leading supplier worldwide. Sinovac Biotech leads the global Covid-vaccine production, but other Chinese companies like Sinopharm, CanSino Biologics, and Anhui Zhifei Longcom Biopharmaceutical also produce vaccinations against the Coronavirus.

Even though China’s general policy tightening also doesn’t stop at the Chinese pharmaceutical industry, in the mid and long run this isn’t likely to damage national big pharma companies.

Sinopharm Group

Founded in 1998 by the government-owned China National Pharmaceutical Group (CNPG), the Sinopharm Group is a Chinese pharmaceutical company. Today, the CNPG is a majority shareholder of Sinopharm.

In fact, the Sinopharm Group is the third-largest pharmaceutical company in the world after Johnson & Johnson and Pfizer, and is part of the 2021 Global Fortune 2000 list, as well as the ETF “MSCI China Health Care ETF“. Sinopharm debuted its H Shares on the SEHK in 2009. 

  • H Shares (Hong Hong) Ticker: 1099
  • ISIN: CNE100000FN7
  • Risks: controversy around ineffective DPT vaccines (2017); plateau in global Covid-vaccines; Chinese policy headwinds; “hold” indication by industry experts
  • Opportunities: established company; government-backed 
Source: tradingview.com (11 February 2022); currency in USD

WuXi Biologics

Founded in 2010, WuXi Biologics provides laboratory and manufacturing services for pharmaceutical and biotech companies. WuXi Biologics has state-of-the-art research and manufacturing facilities around the world as well as partnerships with international big players in the industry.

In 2020, WuXi Biologics was selected to be a part of the Hang Seng Index in Hong Kong. Interestingly, Sinopharm is not part of the HSI. WuXi Biologics is part of the “MSCI China Health Care ETF“.

Wuxi Biologics produces ingredients for vaccines including AstraZeneca’s Covid-19 vaccine.

  • H Shares (Hong Hong) Ticker: 2269
  • ISIN: KYG970081173 (VIE)
  • Risks: highly competitive market that requires special knowledge, skills, and access (e.g. patents); historic volatility; US-trade halted in early 2022; policy headwinds by the Chinese government; “hold” recommendation by industry experts
  • Opportunities: growth opportunities in a booming sector once trade issues are sorted; 100%-200% growth in revenue and profit in 2021
Source: tradingview.com (11 February 2022); currency in USD

6. Insurance Industry

Over the past decade, the Chinese insurance industry has experienced rapid expansion. Steadily increasing demand is fueled by (a) a growing, aging, and wealthier population, (b) a strong economy, (c) consumer awareness, and (d) government investments including lower entry barriers by the Chinese government for foreign insurers that are now allowed to establish joint-venture insurance firms in China. 

Overall, there are more than 230 insurance companies registered in China, with a little over half domestic firms, and the rest foreign-funded. By 2029, the Chinese insurance market is predicted to surpass the US insurance market.

The largest Chinese insurance companies are China Life Insurance (approx. 50% market share), Ping An (approx. 16% market share), China Pacific Insurance, the People’s Insurance of China, and New China Life Insurance.

Ping An Insurance

Also known as Ping An of China, Ping An Insurance is a Chinese holding conglomerate. Although Ping An started as a property and casualty insurance company, it has now expanded into life insurance, banking, online financial services, wealth management businesses, healthcare, auto services, and smart city. Its strategic goal is to become a comprehensive financial services provider.

Founded in 1988, Ping An literally means “safe and well”. The company is China’s second-largest insurer and was the largest insurer in the Asia-Pacific region until 2021 when AIA took that place. Besides, Ping An is the second-largest insurance company in the world in terms of net premiums written after UnitedHealth Group Incorporated (USA).

Ping An’s IPO was in 2004. Today, the company is in the top 50 of the SSE and the SEHK. It is also included in the CSI 300 Index and the Hang Seng China 50 Index. Besides, Ping An ranks in the top 10 of the Forbes Global 2000 list.

  • H Shares (Hong Hong) Ticker: 2318
  • ISIN: CNE000001R84
  • Risks: competitive industry; tied to the economic development (in particular auto and real estate purchases)
  • Opportunities: established and leading company in China; reputable; above-average growth rates in the insurance industry (tech-powered); ecosystem of services offered; fair profitability; considered moderately undervalued; excellent risk-to-reward-ratio
Source: tradingview.com (11 February 2022); currency in USD

7. Luxury/Sports Industry

The size of the global sportswear is currently at over 350 billion USD and is expected to exceed 420 billion USD by 2026. Of course, you are familiar with the big global players in the industry – Nike, Adidas, Puma, Under Armour, New Balance, and the likes. In China, Anta Sports (15%) and Li-Ning (7%), dominate the sportswear sector. 

Sportswear and athleisure wear are gaining popularity and have arrived in all social classes. Fueled by innovation and technological development, comfortable and sporty clothes perfectly fit and complement today’s busy lifestyle.

Anta Sports

Founded in 1994, Anta Sports is a Chinese sportswear and accessories multinational company with more than 25 brands. It is China’s largest sports brand, the world’s largest pure sports equipment company by revenue, and the third-largest manufacturer of sporting goods overall after Nike and Adidas.

Through the 2008 Beijing Olympics, Anta Sports expanded its footwear, and in 2022, Anta Sports became the official sportswear partner of the Winter Olympic Games in Beijing.

Anta Sports’ IPO on the SEHK was in 2007. In 2009, the company acquired the Fila trademark in mainland China, Hong Kong, and Macao. Anta Sports is also the official supplier and sponsor of various international sports teams, players, and associations.

Source: tradingview.com (11 February 2022); currency in USD

Li-Ning

Founded in 1989 by Li Ning, a former Chinese Olympic gymnast, Li-Ning is a Chinese sportswear and sports equipment company, endorsing a number of athletes and teams worldwide. The brand has international strategic partnerships, including with AIGLE and the Acquity Group to expand into the US market. Li-Ning’s IPO on the SEHK was in 2004.

Li-Ning is China’s second-largest sports brand, utilizing sponsorship deals with athletes and sports teams in China and abroad to boost its profile. Some of the company’s high-profile collaborations include Jackie Chan and Dwyane Wade. In 2020, as part of Li-Ning’s 30th anniversary, the brand held a fashion show during the Paris menswear fashion week.

Even though Li-Ning was not an official sponsor of the 2008 Beijing Olympics, the company expanded its reach and position as sports and business icons by providing outfits for TV presenters.

  • H Shares (Hong Hong) Ticker: 2331
  • ISIN: KYG5496K1242 (VIE)
  • Risks: controversy around environmental pollution in the production process (2011)
  • Opportunities: established company with the founder on the Board of Directors; industry experts expect a long-term increase of the stock; good return rate; stable growth rate; undervalued according to industry experts; stable and profitable company with low volatility and low risks
Source: tradingview.com (11 February 2022); currency in USD

8. Consumer Goods Industry

Consumer staples generally refer to essential products used by consumers, including foods and beverages, household goods, hygiene products as well as alcohol and tobacco. As such, consumer goods are less affected by economic cycles, meaning they remain stable even in times of economic crisis. 

With China being estimated to be the largest consumer economy globally in terms of purchase power parity (PPP), stocks in this sector are worth taking a closer look at. In China, urbanization, increasing disposable household income, as well as government support for basic goods for lower-income earners and union members, contribute to the growth of the consumer goods sector.

Despite the destabilizing impact of the global Covid-pandemic, companies in the consumer staples sector remain well-positioned as consumers prioritize buying basic goods. As the transmission of the virus decelerates, the sector is expected to return to its longer-term growth trend. 

Headwinds include the ongoing international trade dispute with the US, which potentially slows or halts exports of certain product ranges, an aging population, increased international competition, as well as private labeling which fuels competition.

Kweichow Moutai Company

Founded in 1999, Moutai is also known as Maotai (Pinyin). It is a type of Baijiu, a distilled Chinese spirit (liquor), made in Moutai Town in Guizhou province. Just like champagne, only the Baijiu that is produced in Moutai Town is allowed to be called Moutai, and specifically, only the Baijiu that is produced by the Kweichow Moutai Company, which is partially owned by the Chinese state.

Kweichow Moutai is the most famous Chinese liquor brand. What makes this luxury spirit an elite alcohol brand, and so popular is that it is favored by Chinese politicians and businesspeople who want to impress their partners during important business meetings and events. Its limited supply makes the brand even more sought-after. Baijiu is usually not consumed at home or alone, but during business lunches or other corporate events. 

Building a good relationship (Guanxi) is above everything else when doing business in China. Toasting with a glass of Baijiu is said to bring luck. There is even a saying “As long as there is a business in China, there will be Moutai”. In other words, this special liquor helps to do business in China smoothly and to get the deal sealed.

Besides, Moutai, as the national drink of China, became the beverage of choice for greeting foreigners on official state or business visits. It is also used as a bribe for high-ranking officials. Today, Moutai sells more than 200 tons in more than 100 countries around the world.

Kweichow Moutai Company’s IPO on the SSE was in 2001. Today, Kweichow Moutai is among the most valuable public companies in China, with the current top five being Tencent, Kweichow Moutai, Alibaba, ICBC Bank, and China Merchants Bank. Finally, Kweichow Moutai is the largest net asset holding of the MSCI China Consumer Staples ETF and the MSCI China A Index.

  • SHA Ticker (China): 600519
  • ISIN: CNE0000018R8
  • Risks: internal organizational structure and leadership changes; government and political interventions (e.g. pricing); counterfeit products (with limited comparability to the original so far) 
  • Opportunities: established company; state-backed private company; crisis-resistant niche; decent growth; positive cash flow; zero debt; truly unique brand positioning; strong brand loyalty; limited competition
investing in chinese stocks
Source: tradingview.com (21 February 2022); currency in USD

Hengan International

Founded in 1985, Hengan International is the largest producer of sanitary napkins and baby diapers in China. They export their products into more than 60 countries around the world.

Hengan’s IPO on the SEHK was in 1998. Hengan is currently ranked 11 in terms of net assets of the MSCI China Consumer Staples ETF.

This evergreen industry supplies China’s populations with sanitary napkins, baby and adult diapers, and other personal hygiene products. By integrating technology and e commerce platforms, Hengan is finding new ways to unlock growth potential.

  • H Shares (Hong Hong) Ticker: 1044
  • ISIN: KYG4402L1510 (VIE)
  • Risks: stock decline since 2015, possibly due to sell-off by banks that held the shares as collaterals to the company’s loans
  • Opportunities: established company; safely financed; undervalued according to industry experts; evergreen sector that will likely recover after the plunge; industry-average dividend payout ratio
investing in chinese stocks
Source: tradingview.com (11 February 2022); currency in USD

This brings us to the end of the overview of the largest industries and companies in China.

How to Get Started with Investing in Chinese Stocks

Perhaps the easiest way to get started with investing in Chinese stocks is through Chinese ETFs which are available easily and quickly around the world.

An exchange-traded fund is a basket of securities that trade on an exchange just like a stock. As an ETF basket consists of several securities, their prices are generally less volatile and therefore less risky. 

Besides, ETFs typically have steady long-term growth, although the potential gains are typically much lower than certain stocks that have the potential to “explode”. MSCI (Morgan Stanley Capital International) ETFs are among the most known.

ETFs generally provide investors with exposure to A Shares, which private foreign investors cannot buy as individual stocks. Besides, ETFs minimize individual China stock risks and are easier available as more and more Chinese companies are listing in Hong Kong or Shanghai, instead of or beside the US, where delisting is a threat.

Finally, investing in ETFs is generally easier as investors don’t have to research and follow individual stocks.

  • CSI 300: It tracks 300 stocks with the largest market capitalization and liquidity among A Share companies in China.
  • Dow Jones China Offshore 50: This index tracks the largest companies that primarily operate in mainland China but are traded on exchanges in Hong Kong or the US.
  • FTSE China 30/18 Capped: It tracks Chinese companies with large and medium market capitalization that are listed on stock exchanges in China (A Shares) or outside of China (B Shares, H Shares, P Chips, Red Chips, S Chips, N Shares).
  • FTSE China 50: This index tracks the 50 largest and most liquid Chinese companies listed on the Hong Kong Stock Exchange (H Shares, Red Chips and P Chips).
  • FTSE China A-H 50: This index tracks the 50 largest Chinese A Shares listed on the Shanghai or Shenzhen stock exchanges.
  • FTSE China A50: This index tracks the 50 largest Chinese A Shares listed on the Shanghai or Shenzhen stock exchanges in local currency. 
  • MSCI China: This index tracks the largest and most liquid Chinese stocks, listed on the Hong Kong stock exchange (H Shares, B Shares, Red Chips, P Chips). 
  • MSCI China A: This index tracks the largest and most liquid Chinese A Shares in local currency and is listed on the Shenzhen and/or Shanghai stock exchanges.
  • MSCI China A Inclusion: This index tracks China A Shares and is also included in the MSCI Emerging Markets. 
  • MSCI China All Shares Stock Connect Select: This index tracks large and medium Chinese securities, including shares listed in Shanghai or Shenzhen (A Shares, B Shares), Hong Kong (H Shares, Red Chips, P Chips) as well as foreign listings.
  • MSCI China H: This index tracks the largest and most liquid Chinese H Shares that are listed on the Hong Kong stock exchange. 
  • S&P China 500: This index tracks the 500 largest and most liquid Chinese companies (all share classes including A Shares and offshore listings). 

In terms of individual stocks, foreign investors can invest in China through

  • A Shares (only professional investors through the QFII program), B Shares, H Shares (Hong Kong listed Chinese companies)
  • ADRs at US stock exchanges
  • Unlisted Chinese mutual funds
  • VIEs

collaborating with a broker who offers access to stock listed in Mainland China, Hong Kong, or other Chinese exchanges of interest. An example of a broker with good coverage and offers is Interactive Brokers.

Alternatively, foreign investors can take advantage of China’s potential by investing in foreign businesses that are expanding in the Middle Kingdom.

Investing in Foreign Companies That Grow Business in China

Some investors may prefer to stick with what they know while lifting the potential of the exciting Chinese growth market. In this scenario, foreign companies that massively expand in the Middle Kingdom may be an option.

Investors may be interested in the likes of Apple, Nike, Starbucks, Unilever, Apple, and Yum! Brands (Pizza Hut, KFC, Taco Bell) – all of which have seen a significant growth surge in China.

What to Consider before Investing in Chinese Stocks – The Takeaway

2022 is the year of the Tiger. The time to invest in Chinese stocks is now! With the New Silk Road, the largest infrastructure project of new history, China aims to become the most influential economy by 2050. The project also aids China’s global geopolitical power and influence. 

As such, Chinese companies across a variety of sectors are expected to continue to grow and expand – an ideal investment opportunity. China’s large market size and 1.4 billion population present an opportunity in itself. Besides, the Middle Kingdom’s capacity to innovate and lead the global technology and digital sectors, make stocks of Chinese companies worthwhile to consider for investment. Finally, foreigners can diversify their investment portfolio with Chinese stocks.

At the same time, investors need to keep in mind the risks of investing in Chinese stocks, which are mainly arbitrary regulations by the Chinese government, insider trading, VIEs as an auxiliary construct for foreign investors, and politically-motivated US-delistings.

Foreigners who are interested in investing in Chinese stocks can do so, some of which may not be 100% in line with the Chinese law, but are tolerated. Overseas investors can invest in Chinese companies through ADRs, ETFs, mutual funds, A Shares (only professional investors through the QFII program), B Shares (also for private investors), H Shares (Hong Kong-listed Chinese companies), VIEs, by collaborating with Chinese businesses in mainland China, or by investing in overseas companies that expand in the Chinese market, e.g. Nike or Yum! Brands.

investing in chinese stocks

Do you want to find out more about the Chinese investment landscape, trending companies, and how to invest in Chinese stocks? Book your investment consultation today!

Disclaimer: The information in this article on investing in Chinese stocks has been researched to the best of our knowledge and is dated Q1/2022. Government regulations may change and investment tactics depend on your very specific personal situation and knowledge. Therefore, this article may NOT be construed as financial or investment advice.

The post Must-Knows Before Investing in Chinese Stocks appeared first on Tenba Group.

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