A introductory guide - importing from China

15th June 2018

China has established itself as the world’s leading trading nation and largest exporter since 2009. With its vast-population, comes job scarcity, which in turn means labour and the manufacturing is therefore cheap. The labour workforce is huge and are able to produce items in bulk and able to cater for sudden rises in demand. This model is unrivalled and it's little wonder the UK continues to capitalise on it with imports amounting to £43.2billion in 2016.

China is set to remain the UK’s fifth highest importer of goods and it's showing no sign of slowing down, so it’s certainly worth considering the following if you’re in the process of importing from China:

Find a reputable supplier

It’s important to strike up a good relationship with your suppliers and find a contact who’s reputable and able to fulfil orders to your requirements. Use the due-diligence checklist in our previous import guide, to cover fundamental steps to avoid dealing with a dishonest and problematic supplier:

  • Calling the supplier
  • Checking public information
  • Obtain testimonials
  • Request samples
  • Meet the supplier

The above checklist is a great place to start if you have a list of possible suppliers. However, if you’re certain of the product you’re importing but still on the lookout for a trusted Chinese supplier, we’d recommend these sites:

Ensure goods aren’t banned from being imported into the UK or require an import licence. In certain instances, goods are subject to strict import controls and it’s essential to check before shipping. The UK government implements three types of controls:

  • Bans - forbidden to import
  • Quotas - where the volume of goods is restricted
  • Surveillance - the import of goods is monitored with licenses

Goods currently subject to import bans and licensing controls are:

  • UN ban on the import of anti-personnel mines
  • EU quotas on textiles and clothing from Belarus and North Korea
  • EU quotas on steel products from Kazakhstan
  • EU ban on the import of torture equipment
  • EU ban on the import of certain products from Iran
  • EU ban on the import of certain products from Syria
  • EU ban on the import of certain products from North Korea
  • EU ban on the import of certain products from Russia and Crimea
  • UK licensing controls on the import of firearms

Conduct marketplace research

If you’ve never traded your chosen goods, it’s important to ensure there’s a marketplace so your business can be profitable. Whilst business owners may assume there’s a market for their products and services, data is the key cornerstone to qualifying your product or service.

Use these steps to gauge your opportunity:

  • Google Trends - should be used to check the popularity of key search terms for your product. For example, if you’re importing car covers, you should ensure there’s demand for a specific cover such as ‘2014 VW Golf car cover’ or ‘2018 Range Rover Sport car cover’. If these return high volumes of month searches, you can consider there’s a demand for that product.
  • Social listening - is the process of listening to digital conversations to gain understanding and insight to what consumers are saying about a particular, brand, product or service. It can be as simple as searching a specific term in Twitter or Google. We’d also suggest adding the word ‘forum’ on the end if searching in Google, which will lead you to an actively engaged audience. By doing so, for example, you may come across a VW Golf forum, in which the members are actively seeking a car cover but there isn’t one currently on the market. Whilst demand on this given forum might not be huge due to low registrations, the Golf is amongst the best-selling car of all times, so it could be a worthwhile investment. If you’re interested in executing a wider, automised and more detailed social listening plan, we’d recommend the following software:

    1. Hootsuite
    2. TweetReach
    3. Klout
    4. Buzzsumo
  • Market reports - Mintel reports tend to be expensive but provide comprehensive insights into specific industries and marketplaces. If you’re investing large sums into a new product or project, they’re certainly worth considering.
  • Google Survey - create a list of specific questions and pay publishers to answer them. Google can then aggregate and analyse the outcomes.

Understanding currency

The national currency for China is Renminbi although the majority of trade is actually settled via US Dollars. This is because China deals with a large amount of trade with the US and there are also many hoops to jump through when dealing with RMB. We would also suggest your consider a forward contract, if you’re importing on a regular basis and these can help to reduce risk on currency fluctuations. We have previously covered this subject in our fluctuations article.

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