Sertus: Your Local Partner for Selling into China

1.3 billion consumers strong, China is the most populous country in the world and offers tremendous opportunities for non-Chinese MNCs (multinational corporations) looking to grow international sales.  More importantly, there is a strong middle class emerging of around 25 million to 30 million households – a key driver of the growth in a lot of consumer categories.

Since 1980, Chinese GDP has been growing at an average 10% a year after inflation. Per capita income in China has grown by a factor of seven during this same period, a clip greater than what Japan saw during the 25 years following World War II. With this increase in personal wealth, most basic needs are now being taken care of and Chinese consumers are shifting consumption to non-essential goods.

However, the consumption preferences and behaviors, demographics and distribution dynamics are not easily understood, and anyone interested in selling into China should not underestimate the skills needed to be able to compete. While big-box retailers have invested in Western modeled distribution networks, the majority of goods and services are still sold via a complex web of state owned distribution companies and small private wholesalers. Logistics make up around 20% of China’s GDP, compared to only 10% in the US and it is not uncommon to find that getting goods from once city in China to another can be more costly than shipping them overseas. All of this adds a level of complexity to selling product in China that can trip up even the most experienced MNCs.

Over time, the infrastructure challenges, distribution inefficiencies, and complexities will gradually dissipate. But at present, local knowledge and relationships are giving a big advantage to emerging Chinese companies over their Western competitors when selling in China. The opportunities are extensive but so are the risks if you don’t have a local on your side.

At Sertus, we have the experience and network of relationships you need to help you navigate this enormous and diverse market. Contact us today to get started on your China sales initiative!

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