Studying How to Import Products Into China

Posted by Michael Michelini on Jan 18 2011

Monday morning here in factory land Dongguan, China! I went over the process of importing into China via Hong Kong this past saturday at the Sheznhen ecommerce meeting, and because so many people were interested in it, I thought I would blog about it as well. Really, its because I’m involved in it, but all I hear about is IMPORTING INTO CHINA, spinning the tables!! I keep on looking for good products to import into China. And when I blog, I become even more familiar with it, as re-iterating it makes things more clear and organized in my mind.

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) Illigal 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!

Sunny_Irish

great, it helped a lot! thank you!
http://blog.michaelmichelini.com Michael Michelini

Thanks for the comment Sunny – yea I’m still learning about importing into china …. 4 years here. but sharing what i can and getting lots of great emails and feedback.
Christian

Have you successfully imported american products legitimately?

I was in GZ for 4 years and still have an office with a few staff where I export mainly hotel supplies. I’m in NY now where I bought into a retail shop (and import all the products directly ^__^)

Now I have an awesome product that I know will do well in China, but not sure how to go about it. I have a girlfriend of 2 years that I’m probably going to marry and my thought was just to open the Chinese import company in her name and use my American LLC to export it.
Any advice is appreciated, and if you went to college in America, you definitely know the product I’m working with
http://blog.michaelmichelini.com Michael Michelini

Hey Christian,

Nice to connect and thanks for the detailed comment.

I have not imported for my own “account” but have many friends here in Shenzhen who have successfully imported products from America, in all of the above choices (white and….grey, heh)

I think, again, THINK if you will really marry your gf and you trust her, then that would by far be the fastest and cheapest way. But you should get some quotes on the import tax before sending anything – you have samples in China already for a customs agent then that would be the best.

I did register a WFOE in China (I recently blogged it here – http://blog.michaelmichelini.com/2011/12/registering-a-chinese-business.html) which outlines costs / options for company formation in China – but for
an import licence in a WFOE, in 2008 when I registered my company, minimum capital investment in the company was 300,000rmb (currently now about 45,000usd) and then you can import goods in your own 100% foreign owned company. DEPENDING ON THIS PRODUCT LINE, it has to be allowed by the Chinese government that a foreigner can sell/ deal with these kinds of products.

A local Chinese (your girlfriend/ possible future wife) can open a company
very quickly and easily, but they would own and control the inventory.

Also, what is your distribution model, B2B, B2C in China?

Maybe you can email me more info at site @ michaelmichelini.com if you want
to get into specifics on products.

_____________
Michael Michelini
eCommerce Consultant
Susan

hello. Can I have a questions. your articles really help to me.

I want to know is if we importing products from HQ in Germany. should I pay back EUR within 90 days? can I call you ?

Susan
http://blog.michaelmichelini.com Michael Michelini

hi Susan,

glad this article on importing into china helped. maybe Email me more details at my company email mike @ shadstone.com to understand more, then we schedule a call

___________________________________
Michael Michelini
eCommerce Consultant
twitter/weibo @michelini
On Jan 31, 2012 11:13 PM, “Disqus”
Louise

Hi Michael

Great blog. Do you have any info on import licences for gold & diamond jewellery? There is so little clarity on the net and we have come across this via a Chinese logistics company. Its baffling as when we had meetings with DHL, Fedex and TNT in the UK there was no mention of needing a licence to import gold/diamond jewellery.
http://blog.michaelmichelini.com Michael Michelini

Hi Louise,

This is why I decided to stay in China! Things are so unclear, the best way I can do things is sit right next to the logistics company in their office, drink tea, and wait for a couple hours to get the full story!

The best is to mail samples to China…but since this is a high value item, I would think you can’t budget this! Maybe send me high res photos and product information and I can talk to some Chinese logistics guys – site @ michaelmichelini.com
Babak Nabavian

Hello
Michael Michelini,
I like to export frozen chicken parts into China. but the problem is the origin of the products are Bulgaria and Israel and Turkey. Can you help?
Jie Fv

Hi Michael
Thanks for the clearest information i,ve found so far online in regards to importing into China.
Howardl

Hi Michael, I have a branded product made in Canada and would like to sell it into China, I already have orders from Watsons and a distributor. All I hear are horror stories about registering the product into China. we have 7 flavors of shampoo and 7 flavors of conditioner. again people tell me that i must register all 14 items and other people tell me I only need to register 1 sh and 1 con.. as the ingredients are all the same except for the color and scent..
http://blog.michaelmichelini.com Michael Michelini

hi Howard…. yes Importing into China is never a fun process. Never a clear answer here, but again its bette we take this into email and I’ll have my team look into it. Have you already sent samples into China? We can also help you by first getting some smaller orders to Hong Kong first and then moved into Mainland China as you go.
Leon

Hi Babak, Nice to see you on this site.
Dan

Michael, was wondering if you’re still there in Shenzhen at this time. I’m in a very similar situation but a little different all at the same time. I know this was posted a little whiles back so let me know so we can share some experiences. I am a freight forwarder in the States and because of that I know local agents in China. Instead of handling cargo for other customers I figure it’s time I give it a try myself. Let me know.
http://blog.michaelmichelini.com Michael Michelini

yup i am still in shenzhen…. helping westerners sell in china via http://www.socialagent.me startup would love to catch up with you for a drink here in shenzhen
NotMe

Is it illegal to buy small quantities of items in Us from Stores such as Best Buy or Macys and ship them thru. Hong kong for sale in mainland China? I know some Asians in Us that do so sending it to a family member in China who in turn sells for a profit.
http://blog.michaelmichelini.com Michael Michelini

small amounts for wgift or personal use is ok. but when its for resale…. that is when it becomes illegal imports
Eric Meslier

Hello Micheal, thanks for this very interesting blog. I would wish to import UK infant milk to shenzhen. Can you refer any logisctic company in HK, who can do all the paperwork? any idean about the price today and taxes? my email is [email protected]

About Mike

American internet dude living in China (since '07) helping western companies leverage Chinese social media for business.

Passionate for working with more like-minded internet entrepreneurs. Love international business & connecting, and working on ways to give hard working people global opportunities. (Read More...)