I believe anyone can give good advice and make better decisions in business. China is no exception.
High brow discussions make simple things complicated and it’s easy to get lost.
The more “smart” or “expert” voices you hear, the more confusing things can become.
You begin to question everything. But the truth is that all you really need is COMMON SENSE.
So I want to know what YOU would tell this client.
Doesn’t matter if you’ve ever stepped foot in China or worked in a business.
Even my 12-year old daughter got it right.
Here’s the situation:
1) The client sells energy drinks made of fruit, an unregulated “food” that can be easily imported and sold in general trade.
2) 90%+ of all trade in this category is domestic, meaning it is sold in grocery, convenience and other physical stores.
3) Beverage is a business of immediacy. If you are thirsty, you want a drink NOW. If you are tired, you want your energy boost NOW.
4) They are bulky and heavy (500g to 1kg per) and are CHEAP, like the cost of a can of Coke.
5) They want to launch ecommerce and have all the proper licenses and legal infrastructure, including host entity and importer in China.
They’ve been advised by one of the Big 4. The advice they received is horrible. No question, that if followed their sales will be poor and the operation unsustainable.
Maybe their strategy team is saying those things because it is expedient. Maybe it just sounds good. Or makes them look smart. Or they just want to be in line with what everyone else is doing or saying.
SOOO, here’s my question:
Would you tell the client to sell into China cross border or open a local store?
Cross border means that the drinks are sitting overseas and every time someone places an order the product needs to clear customs and run through international shipping procedures.
Local means that the online store is sitting “inside” China and product can ship on demand.
Weigh in below...