Internationalization on foreign markets

The phenomenon of globalization is associated with various business processes, from production and purchasing to sales: companies in fact seem to follow a process of progressive internationalization of all their functions in search of new competitive advantages.

We support companies in the internationalization phases, so that they can sell and purchase products or services abroad, create production and commercial offices or strategic alliances outside of Italy, also with a view to international tax planning.

We carry out specific market studies, particularly on the Chinese market, in order to:

• locate industry trade fairs in major cities, such as Shanghai, Beijing, Shenzhen & Guangzhou (Canton);
• find and analyze Italian and foreign competitors present on the Chinese market, as well as their sales system and the market prices applied;
• find and analyze potential customers in China for the products you intend to sell;
• check the import procedures from Italy, as well as the costs, methods and transport times.

We implement different Global Sourcing configurations (management of purchases outside national borders) to allow companies to source the most convenient products and services (with particular attention to the Chinese market), offering the necessary assistance in the various phases of supplier scouting, negotiation, contracting and shipping.

We offer different market entry strategies, from the creation of online shops for e-commerce sales, supporting the entire logistics chain that allows the supply of products from Italy to China, to the creation of more complex structures, from sales and distribution networks to the creation of representative offices or actual industrial/commercial plants.

In the attached file, you will find a practical case of preventive analysis that we have carried out for one of our clients in the agri-food sector: read carefully and you will discover how it is possible to enter the Chinese market without huge investments

Why turn to China?

Industry research speaks clearly: Made in Italy is in high demand in China!

When we think of Italy, we often refer to those sectors that have allowed it to occupy a position of excellence and that have always been characterized by a high level of specialization, or what are commonly defined as the 4 A's of Made in Italy: Agri-food, Clothing/Fashion, Home furnishings, Automation-mechanics.

As for the agri-food sector, for example, the Chinese love Italian food: according to data released by Coldiretti, every year the export of Italian food products to China increases by about 30%.

Among the most exported products we have wine, olive oil, pasta but also dairy products and sparkling wine. But fashion is also very appreciated, so much so that any product bearing the label 'Made in Italy' is purchased at exorbitant prices.

China is a country that offers extremely interesting numbers. In the face of a constantly increasing population, it must be said that the per capita income is also increasing, with a significant increase in the segment of the population considered wealthy and which is also the one most fond of Italian products.

The increase in consumption is directed towards those second and third tier cities which, from an income and socio-cultural point of view, would also seem ready to welcome the Italian product, on a par with the four most “Western” cities and commonly defined as the “big four”: Beijing, Shanghai, Guangzhou and Shenzhen.

A final element that favors the sales of Italian products is represented by the fact that China, being a country too large to consider the idea of opening a sales point in every city, has given a strong boost to e-commerce.

An interesting element to underline, which differentiates the Chinese market from the Western one, concerns the influence of social media: particular importance is given to videos and films, including advertising of luxury brands, spread online.

To be truly successful in China it is therefore crucial to keep in mind and understand, especially for the purposes of positioning on search engines (Baidu is the most used search engine in China), the characteristics of the language, which is vast and varied and composed of hundreds of distinct linguistic variants.

How to internationalize your business

Client: Chemical company producing additives, pigments and dyes, both natural and synthetic, for the food industry; turnover of 8 million Euros.

Problems: sales are declining and focused on the Italian market, in a context of generalized reduction in consumption and growing competitiveness, with the need to identify new commercial outlets and different distribution channels.

Intervention: 12-month internationalization plan to find new customers and strategic partners abroad. Given the high quality of the products, their ease of transport and the fact that some of the customers were part of multinational companies, attention was turned to the Chinese market, proceeding through the following steps: identification of trade fairs in the most important cities (Shanghai, Beijing, Shenzhen and Guangzhou); analysis of Italian and foreign competitors present in China, as well as their sales system and applied market prices; scouting of potential Chinese customers; verification of export procedures from Italy, in accordance with the provisions of MOFCOM (Ministry of Commerce People's Republic of China) and AQSIQ (Administration of Quality Supervision, Inspection and Quarantine); analysis of costs, methodologies and transport times, taking into account that the import of agri-food products into China is subject to value added tax (special regime at 13% and not ordinary at 17%), customs duties (which fluctuate between 15% and 20%) and consumption tax, the latter progressively abolished for the main products. The internationalization activity, also carried out thanks to our Italian correspondent resident in Shanghai, present on site for over 15 years, involved visiting the main trade fairs and some potential customers, before reaching the signing of the first supply contract with Unilever; subsequently, a company was opened in China, 100% controlled (WOFE), for the distribution of products on the Chinese market.