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China Entry Programme | SMART • SIMPLE • SEAMLESS
Market Entry and Regulation
China Entry Programme | SMART • SIMPLE • SEAMLESS
How to future-proof your business in China
Speaker:
Chong Ka Wee, CEO and Co-Founder, Kinofy Pte. Ltd (Singapore)
China Entry Programme | SMART • SIMPLE • SEAMLESS
How to future-proof your business in China
Kawee ChongCo-Founder & CEO
1© Copyright 2017 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
The World Biggest Economy… CHINAChina is leading a global transformation.
Economies are driven by the hyperconnected consumer, right from their personal circles to their mobile phones.
Enterprises need to revolutionise their processes, form new partnerships that will lend expertise and support, employ relevant platforms and connect with the right people, to adapt to today’s demands for convenience, authenticity and quality
2© Copyright 2017 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
Key Challenges of doing Business in China
Trust BureaucracyInternational
Company StructureDiversity
(613 cities)
Political RiskForeign Laws& Regulations
Supply ChainComplexity
Money(Out of Country)
3© Copyright 2017 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
Daigou
代购
Microboss 微商
Go abroad to buy出国购买
Traditional importation一般贸易
Cross-border
E-commerce跨境电商平台
Procedures No No No Formal Channels Formal channels
Tax Customs Taxation Illegal tax avoidance
Customs Taxation VAT + Custom Duty Combined tax but exempt from VAT
Logistics Unstable timing Unstable timing Unstable timing Stable and timely Stable and timely
Operation System is incomplete
System is incomplete
No System Systematic support Systematic support
Merchants Low brand credibility Low brand credibility Low brand credibility High brand credibility High brand credibility
DIFFERENT WAYS of Product registration & importation – Health & Beauty products
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China Entry Programme | SMART • SIMPLE • SEAMLESS
Traditional importation一般贸易
Cross-border
E-commerce跨境电商平台
Product Registration Cost High Low
Product Registration Lead
Time270 to 1080 days* Less than 2.5 months
Office Setup YES No need
Business Administration High Cost Low Cost
Taxes VAT 16% + Custom Duty Import Tax Combined Tax
Packaging & Inventory
Must change and adhere to the Chinese labelling, wordings on
packaging are in Chinese No need to change, use English or orginal
language packaging
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DIFFERENT WAYS of importation & PRODUCT REGISTRATION
China Entry Programme | SMART • SIMPLE • SEAMLESS
E-Marketplace Own Brand e-Shop in WeChat
Business Model B2CB2B2C
B2C
Security Deposit YES NO
Platform Fee YES YES
Barrier to Entry
• Average to High• New merchants need to submit business data
and product information for review • It takes 2 – 3 weeks for an application to be
processed
• Low • New merchants need to submit business data
and product information for review • SMEs, Brand Owner or Authorised Distributor
Logistics & Delivery
• Logistics support is not provided• Merchants will need to set up their own
product delivery channels and warehousing
• Provide an end-to-end order fulfilment system is provided to ensure a consumer will receive his order upon payment
CRM
• Customer service is not provided• Merchants will need to set up their own
customer service team
• Customer service is provided, which includes helping Chinese customers in product-related enquiries
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China Cross border platform solutions
China Entry Programme | SMART • SIMPLE • SEAMLESS
B2b2c IMPORTATION CHANNEL : traditional vs cross border market Entry
9
BUSINESS REQUIREMENTS NORMAL PRODUCT IMPORTATION CROSS BORDER PRODUCT IMPORTATION
Set up Company & OfficeNeed a China registered company
to do registration and importationNot required
Product Registration 9 – 36 months 1 – 2 months
Registration Fee / SKURMB20,000 - RMB30,000
*Approx. USD3,000 – USD4,000No fee
UNLIMITED SKUs
Retail Packaging& Labelling
Adhere to china product labelling, Chinese wordings and product trademarking
*Additional investment in new packaging for China market
Use existing product packaging(Do not need to change)
*One set of inventory forexisting & China market
Custom TaxesImport tax + 16% VAT
*Payment upon clearanceSales collective tax (from 11.2%*)
*Payment only upon transacted sales
SettlementIn RMB
*In ChinaIn USD / SGD
*Outside China
© Copyright 2017 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
Traditional Product Importation Cross Border Importation
Stock Value RMB 1,000,000 RMB 1,000,000
VAT 16% 0%
Import Custom Duty 25% 0%
Combined Tax 0% 11.2%
Total Tax 35% 11.2%
Total Tax Paid for
Importation
RMB 350,000 Cash paid once landed in China
Combined Tax paid when Consumer transact and make the Purchase
Cash flow
RequirementHigh Low
Example B2b2c IMPORTATION CHANNEL : traditional vs Cross Border market entry
8© Copyright 2017 Kinofy Pte Ltd
Adhere to Chinese Labeling law
Use international retail box
China Entry Programme | SMART • SIMPLE • SEAMLESS
Steps to Start Business
(China)
Time Needed Cost / Year (SGD)
Traditional Setup
Office in China
Cross Border
Platform
Traditional Setup
Office in China
Cross Border
Platform
Business Administration 150 days 30 working days USD30,000 Not Required
Product Registration 270 to 1080 days 7 working days
USD3,000 –
USD4,000 per
SKU
Free & Unlimited
Office Setup 30 days NAUSD100,000 –
USD450,000Not Required
Taxes NADuty import tax +
VAT
Combined tax
(upon sales)
Packaging & Inventory > 60 days NA
Not RequiredIT Systems & E-Store Setup 120 days 15 working days
USD240,000E-Commerce ERP &
CRM Systems180 – 360 days 7 working days
TOTAL 870 – 1860 days 73 working daysUSD370,000 –
USD720,000
Subscription
Model
B2b2c / b2c Time & Cost to enter new market
*Terms & conditions apply
9© Copyright 2017 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
China Entry Programme
1. Speed to market: Achieving product
registration in 2.5 month
2. Smart and seamless trace and track
audit review through cloud
technology
3. Plug and play end-to-end cloud-
based solution, technology and
services for the Chinese market
SMART • SIMPLE • SEAMLESS
Sell Smarter
10© Copyright 2017 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
New Market - New Customer - New Channel
©Copyright 2018 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
NEW MARKET
China consumer market to reach
US$6.1 trillion(in Year 2021)
©Copyright 2018 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
NEW CUSTOMER
CHINA1.4 Billion
1.405 Billion people
SINGAPORE5 Million +
©Copyright 2018 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
CUSTOMER
©Copyright 2018 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
HENRY • M&M
IWWIWWIWI
©Copyright 2018 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
CUSTOMER JOURNEY
Like
“I like your brand”
Love
“I love your brand”
Amplify
“I amplify your brand”
Resell
“I am your brand reseller”
25© Copyright 2017 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
Evolution of Retail
STAGES 1. OFFLINE (BRICK & MORTAR) 2. MARKETPLACE (TAO BAO, JD) 3. SOCIAL RETAIL (WECHAT)
Traffic Organic Traffic Search, SEO, Campaigns and EventsContent Social Sharing
Community
Conversion USP & SKU Drive Re-targeting Banner Displays, Customer ServiceChat in WeShop, Dialogue
and Influencers
Repeat Sales CRM CRMBuild customer relation
through direct engagement
Brand Love• Word of Mouth• Leverage on Retail Traffic
• Reviews, Testimonial• Leverage on Marketplace Traffic
• Brand Champions• Social Sharing• Leverage on Direct Customer
Engagement to build a cycle
“ It’s all about social commerce now! ”
19© Copyright 2017 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
m-CommercePlatform
Chinese Social Media platformWeChat reaches 1 billionaccounts worldwide
WeChat ecosystem, China’s biggest and fastest growingsocial media platform.
WeChat is used by over ONE billion people every month(Mar'18). This social media platform has become aninvaluable tool for messaging, reading articles, paying forthings, playing games, and more.
The WeChat lifestyle aims to all of life's daily activitiesmore mobile, convenient, and fun.
20© Copyright 2017 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
latest social selling tools
✓3 Tier Referral✓Loyalty program✓O2O Strategy✓Coupons/Groupons✓Discount with purchase✓Special offer with purchase
✓Repeat sales and re-targeting✓Events/Campaigns✓Timesales✓Crazy bargains/price hacks✓Crazy snipes✓Get a friend to pay
✓Auctions✓Partnerships✓Crowdfunding✓Guess the price to buy✓Distributorships
Etc.
21© Copyright 2017 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
POINTS
P2P: Person to Person Sales Opportunities
• Customers may scan WeChat QRcodes and become salespromoters’ “downlines”
• Sales promoters will be driven todrive sales online with newcommission schemes
• Loyalty points are rewarded withsocial sharing and selling
• Points are exchanged for products• Customers are encouraged to
promote products
• Self collection arrangement• Customer tracking through
QR code scans at different store locations
3-Tier Referral Program Loyalty Programme O2O Strategies
2
22© Copyright 2017 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
Empowering digital possibilitiesNew borderless retail solutions thatprovide SMART, SIMPLE, SEAMLESS andhighly adaptive BUSINESS SYSTEMS forthriving entrepreneurs in highlycompetitive and culturally diverseeconomies
Provides a SAFE, TRANSPARENT,STRUCTURED and PRACTICAL marketentry with sustainable businessinfrastructure for thriving enterprises
16© Copyright 2017 Kinofy Pte Ltd
Enables genuine brand owners and authorised brand distributors to penetrate the China market in a simple seamless and smarter way.
8-Step China MarketEntry Programme
Suitable Sector Food | Health Food | Health Supplements | Beauty & Cosmetics | Kitchenware | Lifestyle & Fashion | Personal medical-care devices (e.g. contact lenses, cholesterol meter, electronics, etc.
15© Copyright 2017 Kinofy Pte Ltd
ManageRisk
ImproveEfficiency
ReduceCost
Increase Revenue
Future-proofthe businessSell Smarter
China Entry Programme | SMART • SIMPLE • SEAMLESS 13© Copyright 2017 Kinofy Pte Ltd
WELCOME TO THE
FUTURE OF RETAIL
18© Copyright 2017 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
For more information :
KAWEE CHONG [email protected]: +65 9007 8170
SINGAPORE
Kinofy Pte. Ltd.12 Tai Seng Street #06-03,Singapore 534118
HOTLINE: +65 6390 9595www.kinofy.com.sg
VISIT OUR
KINOFY SHOP!
SCAN HERE!
GORDON [email protected]: +65 9118 7767
CHINA
69 Guiqing RoadBlock 24, 5th Floor, Room 508Xuhui District, ShanghaiChina
28© Copyright 2017 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
THANKYOU!
29© Copyright 2017 Kinofy Pte Ltd
China Entry Programme | SMART • SIMPLE • SEAMLESS
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