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China Entry Programme | SMART • SIMPLE • SEAMLESS

Market Entry and Regulation


How to future-proof your business in China

Speaker:

Chong Ka Wee, CEO and Co-Founder, Kinofy Pte. Ltd (Singapore)


How to future-proof your business in China

Kawee ChongCo-Founder & CEO

1© Copyright 2017 Kinofy Pte Ltd


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



Key Challenges of doing Business in China

Trust BureaucracyInternational

Company StructureDiversity

(613 cities)

Political RiskForeign Laws& Regulations

Supply ChainComplexity

Money(Out of Country)



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



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

© Copyright 2017 Kinofy Pte Ltd 7

DIFFERENT WAYS of importation & PRODUCT REGISTRATION


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

© Copyright 2017 Kinofy Pte Ltd 8

China Cross border platform solutions


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


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


Adhere to Chinese Labeling law

Use international retail box


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



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



New Market - New Customer - New Channel

©Copyright 2018 Kinofy Pte Ltd


NEW MARKET

China consumer market to reach

US$6.1 trillion(in Year 2021)



NEW CUSTOMER

CHINA1.4 Billion

1.405 Billion people

SINGAPORE5 Million +



CUSTOMER



HENRY • M&M

IWWIWWIWI


https://youtu.be/VAesMQ6VtK8


CUSTOMER JOURNEY

Like

“I like your brand”

Love

“I love your brand”

Amplify

“I amplify your brand”

Resell

“I am your brand reseller”



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! ”



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.



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.



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



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


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.


WELCOME TO THE

FUTURE OF RETAIL



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



THANKYOU!



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market entry and regulation - vitafoods asia · cross-border e-commerce ... receive his order upon...

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