How to tackle the most attractive market of the world
in Covid Time with minimal investment?
Let’s be honest, restrictions related to Covid have made inbound physical investments in Mainland China extremely difficult for brands and companies with no local established presence. Travel restrictions have created a pretty impassable wall for those aiming at investing directly in China. If creating a local team/network is a must when entering the Chinese market, leaving the entire responsibility of an opening to a newly created local team is actually impossible to consider for those aiming at such a strategic market creating knots for senior management teams.
So what can be done? Being realistically optimistic we could say that with the end of the Covid tail far but in sight in China, it might be now the right moment for brands to reconsider their development in China but how?
Brief but major reminder: investing in China requires a pretty timely preparation:
Indeed, incorporating a foreign establishment in Mainland China, if it has been made easier in the last couple of years, still takes more time than an incorporation in most of the other countries … You have to expect at least six months (including bank accounts openings financial engineering related to the investment…) to have a fully operative vehicle. Therefore, in order to be among the first new post-covid entrants to tackle the Chinese market, hungry for novelties, it’s probably the right timing to prepare your investment.
For those interested our factsheet details the procedure to establish properly a physical presence. We’re always happy to discuss your project and design a custom made solution for your needs.
Still not sure about the opening? There is actually a way to test your products in China before establishing a physical presence: the cross border e-commerce platforms dedicated to foreign brands with products stocked outside of Mainland china but easily accessible for Chinese customers. The most famous of them all being TMALL Global (the cross border spin-off or the world famous Tmall).
Requirements are simple: you have to be an existing brand with products stocked out of the Mainland Chinese Territory ( favored destination for stocks are Hong Kong and Chinese free trade Zones) but easy to send.
If we have decided to go for Tmall Global, we are here to help you establish your store on the platform and help you to start selling in China. It could be a good opportunity to learn more about the market for less experienced brands and companies in order to prepare for a more direct investment.
At Fung,Yu we strongly believe that in difficulties lie opportunities and if direct investment in China might seem out of the picture for most of us at the moment it actually might be the right moment to consider it. Another option is to take a step forward exploring alternative solutions to start discovering Chinese market potential.
In both cases, we are here to help find the best solution for your needs.
About the Author:
Mr. Philip Yu
Mr. Yu holds a Bachelor of Commerce (Hon.) from the University of Toronto and L.L.B. (Hon.) from the University of London, and is a member of the American Institute of Certified Public Accountants, Certified Public Accountants of Australia and the Hong Kong Institute of Certified Public Accountants. Philip is experienced in handling cross border taxation issues, corporate restructuring and other cross border business solutions. He undertakes additional posts as Company Secretary, Authorized Representative and Independent Non-Executive Director for several listed companies on the Hong Kong Stock Exchange. He joined our firm in 2001 and currently the Managing Partner of the firm.
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