In recent years cross-border e-commerce (CBEC) is one of the most preferred entry modes for European SMEs when starting in China. CBEC has a lot of advantages: you don’t need an authorized importer in China, you have full control over your branding and pricing strategy, you are able to manage the whole supply chain without intermediaries up to the end consumer, thus making it easier to get the confidence from Chinese consumers. Furthermore, you can collect a lot of data about your customers and their expectations.
It is also possible to open a webshop in WeChat, which makes it even more interesting for foreign SMEs to have and operate a WeChat account. The WeChat shop is linked to the WeChat Official Account of the brand owner. Chinese consumers can use their smartphone to browse products in the WeChat shop, immediately make a purchase, pay with WeChat pay and the foreign company can receive EUR on their foreign bank account.
Once the payment is completed and in case the products are stored in a bonded warehouse, the logistics operator at the Free Trade Zone connected to the WeChat shop clears customs and dispatches the product to the customer. In case the products are stored at the headquarters’ warehouse, the goods will have to be dispatched from Europe to the Chinese customer within 72 hours after order.
Here are the most important steps to set up a WeChat shop:
- Trademark Registration: you should obtain a trademark registered in China for all your products before initiating sales.
- Select a Pilot Free Trade Zone: currently there are 11 Pilot FTZs, but each of them is at a different stage of development, so careful selection is needed.
- Select a logistics operator: the logistics operator plays an essential role in the success of a WeChat shop. Terms and conditions must be negotiated and agreed upon with the 3PL.
- Registering the product at China Inspection and Quarantine: all products require approval from CIQ to be sold online via a CBEC WeChat shop. Certain registration procedures must be followed for each of the SKUs – a process that is not difficult, but must be completed in Chinese.
- Open a WeChat official account: before setting up the shop you must have a WeChat Official Account.
- Set up the WeChat shop: existing templates are available to open a WeChat shop. It is also necessary to have clear product descriptions and pictures, integrate WeChat Pay, connect the shop with a warehouse, and tie into a foreign payment gateway in the back-end.
- Implement customer service and the facilitation of product returns: also for these services it is possible to find third parties. You will also need to agree on a reverse logistics strategy with your logistics operator for product returns.
- Digital marketing: the shop and its range of products is one thing, achieving good sales results is another challenge. A solid marketing plan needs to be developed. Apart from WeChat also presence on Weibo may be considered, as well as involving KOLs and live streaming platforms. All of this requires a reasonable budget, which must be in line with brand expectations.
It is clear that professional advice is required before getting started. Horsten International and its affiliate MyChinaWeb have a lot of experience in helping Western companies with their strategy for China, including social media and e-commerce in China. Please contact us in case you need any help.
Note: This article is an abstract from the recent report of the EU-SME Centre about opening a WeChat shop