As China grows, it is consuming more and more. Its middle class has been hungry for foreign brands and foreign goods. So how do you take advantage of this boomtown in China?
If you have a product that you think would rock in China, but not sure how to logistically get it into Mainland, then read on!
There are 3 methods, (a) traditional and legal way, (b) newer, newly developing method of utilizing logistics companies trucking services, and (c) illegal border smuggling. Lets go through each of the methods:
(a) Traditional, 100% legal way – This is shipping it from the county of origin, with the proper invoices and packing slips and going through customs yourself. There is the base VAT (value added tax, commonly known as Fa Piao) fee of 17% no matter what product it is, plus the tarffi tax, which is a percentage dependant on the classification of the goods, which can get extremely high. No only will you pay a high tax rate, making your newly imported goods more expensive off the bat, you will also have to spend a lot of time with paperwork, and proving the country of origin, the core ingredients of the products – food and other digestable items such as vitamins are highly regulated and difficult to import.
(b) Utilizing a 3rd party Mainland China registered logistics company (import company) – this has become a very popular method, especially for SME (small and medium sized enterprises) that have online shops such as Tao Bao. The method involves having the foreign goods sent to Hong Kong, to the logistic companies warehouse. You then have them take care of all filiing and documentation with the Mainland Chinese government, therefore making the requirements for official invoices and other paperwork much less stringent. The cost for this is also a variable one, but much more straight forward and manageable. For example, if you are importing powdered baby’s milk – the cost (at the time of this article being published) is 14 – 18 chinese yuan (RMB) per KG. Another popular product for sale in china is foreign cosmetics, and the current rate for importing into Mainland China is at least 18 reminbi per kilogram.
(c) Illegal smuggling – This has to be listed in the article to complete the whole story of how goods are currently imported into main land China, but we do not endorse, assist, or support this method. For those who have cross the hong kong / Shenzhen border, you must have noticed the massive boxes and bags some travellers were carrying. There are certain quantities of goods individuals can carry legally across the border, depending on the product – and it is rapidly changing, with the trend in the direction of decreasing the quantity of goods. But for those who risk this method, it makes sense to do this for high value, smaller items – which normally is electronics. In current times, this is iphones and ipads, because the Chinese tax on the domestic Chinese electronics are so high, its significantly cheaper to buy it outside of mainlaind…and in Hong kong or USA.
These are the current three methods of importing merchandise into Mainland China. If you would like us to assist you in the first 2 ways, I will gladly speak to you about your specific case and products. If you are interested in smuggling, good luck and don’t call me!